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A new study has found that three in four Australians believe people are becoming more financially literate and comfortable talking about money with their peers.
The Choosi Dollar Report, conducted by comparison service Choosi, found that being ‘money smart’ is becoming increasingly socially desirable, with two in five Australians saying it is “cool” to talk about money affairs with friends. Almost 70 per cent say that it’s now “trendy” to be seen as financially savvy.
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Almost a third of Australians who responded to the survey said that a key factor driving financial savviness is the desire to "keep up with the Joneses", however the study also showed that there is a growing trend of financial knowledge sharing between friends. Almost 40 per cent of respondents said that their friends have given them "the heads up" about good investments or financial decision that they have made.
Choosi spokesperson Katrina Foster commented, “Traditionally, matters of money were managed and discussed privately. While we might remain quiet on topics like our wages or how much we have in the bank, other subjects such as savings hacks, alternate sources of income and personal investment advice are no longer merely concerns for a finance professional to comprehend.”
The majority of respondents also stated that they had strong knowledge on how to best manage their debt (70 per cent) and interest rate fluctuations and their effects (58 per cent).
In particular, the survey found that Generation Y appeared to be the most financially responsible generation as the most likely age group to have financial goals, adhere to a documented plan and have realistic timeframes in which to achieve them.
Australians struggling with savings
However, Ms Foster noted that while the survey’s findings indicate that Australians are actively improving their financial savviness and sense of responsibility, “there are several noticeable knowledge gaps that impact people’s ability to save and invest”.
“A considerable 30 per cent of respondents didn’t understand the difference between good and bad debt, and a further 62 per cent were unsure of how the share market works,” she noted.
Many respondents described themselves as an ‘average’ or ‘terrible’ saver (63 per cent). They cited a simple lack of money (58 per cent), impulsive spending (22 per cent) and lack of discipline (21 per cent) as common barriers to saving regularly.
Personal finance expert Heidi Armstrong commented, “The more clarity we can get about what motivates us professionally and personally, the more likely we can achieve our savings goals. Our financial aims need to be motivating and plainly defined, not elusive and far-fetched.
“If we think about savings as ultimately delayed spending, the reasons behind linking your savings plan to your financial goals become clear.”
[Related: Study finds link between financial and physical fitness]
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