Insignia Financial release its inaugural Financial Freedom Report.
Insignia Financial’s inaugural Financial Freedom Report highlights the importance of financial literacy and accessible financial education tools, with a third of Australians (31%) report receiving no financial literacy education in their childhood, with 35% receiving a small amount and only 22% receiving a fair amount.
The research, commissioned by Insignia Financial and conducted by social research agency, McCrindle, explores the aspirations of Australians across generations, genders and demographics.
There is room to improve how we prepare and equip young people to achieve financial independence.
From a young age, females are at a disadvantage when it comes to financial knowledge and the lack of adequate financial education often impacts their greater financial wellbeing later in life. Younger females are most likely to report receiving either no (20% Gen Z females, 28% Gen Y females versus 11% Gen Z males, 14% Gen Y males), or a small amount of financial education in their childhood (43% Gen Z females, 39% Gen Y females versus 28% Gen Z males, 28% Gen Y males).
Australians want to do more with their money
Despite a lack of financial education in childhood, Australians want to do more with their money:
- More than half (58%) of Australians want to manage their money better.
- 63% of the population are dedicating more focus to increasing their financial knowledge compared to 12 months ago.
- Financial habits being used to improve financial situations include:
- budgeting
- reducing non-essential spending
- opening a separate savings account
- building additional income streams
- working more than one job or increasing work hours.
While these are all appropriate and helpful financial habits to develop, they may not necessarily be the most effective strategies for cultivating long-term wealth.
Younger generations are actively seeking to strengthen their financial situation
Young Australians (Gen Y and Gen Z) are the most likely generations to spend focus time on increasing their financial knowledge in the last 12 months (82% Gen Z, 77% Gen Y cf. 59% Gen X, 38% Boomers).
- Young Australians are open to improving their financial knowledge to strengthen their financial status, and are more driven to attain financial literacy (28% Gen Z, 27% Gen Y cf. 21% Gen X, 13% Boomers, 3% Builders).
- Younger generations are the most likely to agree they want to manage their money better, demonstrating their eagerness to improve their financial literacy (70% Gen Z, 70% Gen Y cf. 56% Gen X, 36% Boomers).
- Gen Z (13%) are the most likely generation to build additional income streams, work multiple jobs and work more hours to improve their financial security.
- Gen Z and Gen Y are the most open to budgeting (56% & 49%), cutting back on non-essential spending (50% & 47%), and using a separate savings account (48% & 43%).
- However, young Australians are more likely to believe that poor financial and money management knowledge is a barrier to them achieving their financial aspirations (20% Gen Z cf. 15% Gen Y, 7% Gen X, 3% Boomers).
- In early adulthood, 40% of Australians indicated they received no financial help, and 49% reported receiving limited or some financial help.