Heather McGovern

Research out yesterday from MyState Bank has found that three-quarters of Australians (74%) are comfortable with the level of government debt reaching $1 trillion by June 2025 ($37,000 for every Australian), regarding it as necessary to support the economy and Australian livelihoods during the COVID pandemic.

However, when it comes to the individual during the pandemic, a higher level of personal debt is concerning to 62% of Australians, despite interest rates being at historical lows.

The research, undertaken following the Federal Budget, provides insights into the views of Australians and their level of comfort with ballooning government debt, personal debt and the key issues they see coming from the Budget.

When asked which initiatives were the most important during this current period, the creation of jobs was the overwhelmingly most important initiative for the government according to 68% of Australians. This was followed aged care (47%), support for low-and-middle-income earners (45%) and supporting mental health (40%).

The research also found that two-thirds (63%) of Australian are concerned when it comes to ongoing snap state boarder closures due to COVID outbreaks because of its impact on the health of the economy and mental health of Australians.

“Australians are very much focused on their back pocket and looking for the financial silver lining,” said Heather McGovern, MyState Bank General Manager of Customer Experience.

“What started out as a health crisis has been felt in the hip pockets of many Australians across the country, and while lockdown measures have helped some Australians into a better financial position; for others, it has left gaping holes in their household income.”

“This can be seen in the way people ranked the importance of Budget measures – unsurprisingly, job creation is the most important for people, and support for those low-and-middle-income earners, will have the biggest impact in people’s back pockets.”

“Now is the time to focus on putting yourself in the strongest financial position you can be in, whether it be paying off debts, boosting your savings account, or tucking money away if an emergency strikes,” added Ms McGovern.

Here are MyState Bank’s six tips on how to make the most of the Federal Budget and maximise your financial situation:

• Keep a water-tight budget. Track your spending each month and determine the things that you are able to cut back on to limit spending. A good way to assess your finances is by using the 50-30-20 rule; 50% of your salary goes to things you need i.e. rent or mortgage, household bills, car payments etc, 30% on wants i.e. clothing, sports, hobbies, weekend plans etc, 20% to be stashed away in savings or investments.
• Pay down small debts. If you are in a position to do so, pay down small debts, like credit card balances or Buy Now Pay Later debts. Being able to chip away at larger totals will help with any interest being accrued on these balances.
• Pay yourself. It’s all too easy to forget to add to your own emergency fund when you’re focusing on paying for other things. But once the debts are paid down the next most important thing is to focus on building a solid savings nest egg. This way, if you are faced with any unnecessary expenses, it won’t come as a shock to your credit card.
• Let your bank app do the heavy lifting. Make use of any technology your bank offers to help with budgeting and finances. If your bank offers automated budgeting in its app, take a look at your budget categories and consider where you might be overspending. This will be a good indicator if you’re unsure of where to cut back on spending; you might be spending more on food delivery than you realise!
• Find a good savings account. Although it might seem counterintuitive, for those with savings already, find a good savings account that has a good interest percentage on it. It might not seem it now, but putting your money to good use in a higher interest savings account may be beneficial further down the track if you don’t need to access your money.
• Automate it. Some of the hard work towards achieving your money resolutions can be taken out by automating wherever possible. For instance, setting up a high-interest savings account and getting paid directly into this account. The Autosavings capability in the MyState Bank app is another example, helping you recognise how much you can safely afford to save and moving the funds for you – without you having to lift a finger.

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Heather McGovern

While Australians have, to some extent, been negatively affected by the COVID-19 (Coronavirus) pandemic, some are faring better than others when it comes to their financial security. Working from home arrangements and fewer opportunities to spend discretionary income are arguably enabling Australians to bolster their savings at a faster rate than ever before, says MyState Bank.

On the other hand, many Australians are also facing financial stress, with half of the population reporting that they would not be able to afford a $200 increase in monthly household expenses in the latest research from bank.

The survey of over 1,000 Australians commissioned by MyState Bank found that almost four in 10 (38%) Australians did not have an emergency fund before the outbreak of the Coronavirus pandemic. Meanwhile, a third of Australians (33%) have been forced to dip into their savings to get by since the outbreak of Coronavirus.

Of those who admitted to drawing on their life savings during this time, one in 10 estimate they have drained more than half of their savings.

MyState Bank General Manager, Customer Experience, Heather McGovern said that despite financial hardship assistance on the table from the Government and banks, many Australians are still struggling to manage their finances.

“What started out as a health crisis has been felt in the hip pockets of many Australians across the country. While lockdown measures have helped some Australians into a better financial position; for others, it has left gaping holes in their household income.”

Almost one-fifth (18%) of those surveyed reported that the economic implications of COVID-19 have seen their household income decrease by more than a quarter.

“With financial support from the Government winding back in September, many Australians are likely to feel the pinch even more. As a bank we recognise the need to help our customers stay financially healthy during this time,” said Ms McGovern.

According to the research, paying for essentials such as groceries (39%) and paying for household bills (39%) are the biggest reasons why Australians are dipping into their savings during this time.

Commenting on these findings, Ms McGovern said, “The economic implications of COVID-19 have caused many households across the country to redirect their savings to the basic necessities, shelving their big financial goals and decisions, at least, for the time being.”

Almost a quarter of those needing to access their savings (23%) reported those savings were originally being put towards a deposit on a first home, while one in five said the savings were going towards their retirement. A further 25% of respondents were intending to put the savings towards a holiday.

Furthermore, more than four in 10 Australians (41%) expect their finances to continue to be affected in the next six to 12 months by the Coronavirus pandemic.

New AI-driven technology helps customers reduce financial anxiety

To help customers better manage their finances in these uncertain economic environment, MyState Bank has launched a new AI driven banking solution which is in-built into its everyday transaction and savings account products*.

The AI-driven banking solution harnesses transaction data, predictive analytics and artificial intelligence to proactively offer customers insights and advice to help the understand and better  manage their spending, and save more easily. Practical services in the new tool include:

• Notifications for when customers spend more on something than they usually do.
• Bill payment reminders for both automatic bill payments, and bills that are paid manually,
• Previews of customer’s money in vs money out each month,
• Categorised spending so customers can see how much they spend on things like takeaway, groceries and entertainment,
• ‘Tighten-your-belt alerts’ for when it looks like a customer may not have enough to cover upcoming bills or everyday spending.

Accessed via the MyState Bank mobile banking app and internet banking service, the solution can deliver each customer a comprehensive snapshot into their income and spending habits. The tool can immediately recognise and understand small and immediate changes in customer patterns such as deposit delays or balance issues.

“These are challenging times and many customers are experiencing high levels of anxiety. We believe we can play a real role in helping customers with their day to day money management, get on top of their finances and ease their financial stress,” said Ms McGovern.

“MyState Bank has long believed that a personal approach is key for our customers. This new tool is a truly personalised service that uses customers’ own data in a way that helps them get ahead and plan for the important things in their lives.”

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Heather McGovern

With the nation in its first recession in 29 years, Australians are resolving to be better money managers this new financial year, according to new research from MyState Bank.

MyState Bank asked more than 1,000 Australians what their biggest financial resolutions and concerns are coming into the new financial year (FY21). Overwhelmingly, the research found that more than four in 10 Australians (44%) are resolving to rein in spending on discretionary items over the next six months.

More than half of Australians have shelved travel plans over the next six months despite interstate borders likely to open for domestic travel. Other major areas where consumers are resolving to spend less over coming months include public transportation (43%), home furnishings and décor (38%), food takeout and delivery services such as UberEats and Deliveroo (38%) and clothing and footwear (36%).

Surprisingly, gym memberships are also on the chopping block with more than four in 10 Australians planning to cut back the costs of working out. Meanwhile, Australians are also kicking their vices to the curb with 44% and 35% reducing their gambling along with their alcohol and cigarettes spend, respectively.

According to the MyState Bank research, groceries and household utilities are the only two categories likely to see major increases in consumer spending over the next six months with around a quarter of Australians saying they will spend more respectively.

“For many Australians, the introduction of social distancing measures has been an opportunity to save more than ever before on expenses from public transport to dining out at restaurants,” said Heather McGovern, MyState Bank General Manager, Customer Experience.

“Being isolated has also compelled more Australians to consider new and more innovative and cost-efficient ways of doing things, like swapping out memberships at physical gyms for fitness apps. Our research indicates that Australians are likely to prolong their savvier spending habits even after social distancing measures have lifted.”

“At this time of economic uncertainty, we are pleased to see Australians cutting back wherever they can to find a greater sense of financial balance.”

Among the nation’s most common new financial year resolutions were starting and maintaining a budget which over a third of Australians pledged to do. Meanwhile, building an emergency fund and haggling providers for a better deal on big household bills was a key goal for more than one in five Australians, respectively.

Economic outlook tops Australians’ major financial concerns

MyState Bank’s research found that overwhelmingly, the nation’s economic outlook continues to be the major concern for 67% of Australians heading into the new financial year. The research found more than four in 10 Australians reported concern with not having enough savings while 26% of Australians are equally concerned with the employment outlook and slow wage growth.

“While recovery is well underway, the majority of Australians expect long-lasting effects on the economy from COVID-19,” said Ms McGovern said. “With economic growth likely to be in the red over the coming quarter, there are a few steps Australians can take to give them confidence to navigate the future economic uncertainty.”

Here are MyState Bank’s tips on how to find a greater sense of financial balance:

• Paying down any high-interest accruing outstanding debt such as your credit card balance is crucial to create some breathing room in your monthly budget. Not having huge debt is also likely to give you some peace of mind if you are worried about the uncertain job market.
• While a vacation to Europe seemed likely at the start of the year, the new financial year may cause a reprioritisation of savings goals. Perhaps that money might be better placed towards a longer-term goal such an emergency savings fund.
• Given many Australians will be cutting back on workout expenses, swap out your gym buddy for a “financial buddy” to help you conquer your financial goals. Start by having a frank conversation with a close and trusted friend who will motivate you and keep you on track while you work towards hitting your financial benchmark – and, of course, you do the same for them.
• Keep the good financial habits – many Australians have been able to reduce their spending during lockdown – for example, having more dinners at home rather than eating out or being active by going for a walk or bike ride rather than going to the shops.
• Most importantly, being in a recession means living within your means. Do a financial audit to separate your wants from your needs and work out where to cut back. Review all your expenses from your electricity bill to your video streaming subscription – there are often real savings to be made with little impact to your ‘lived life’.

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The risk of individuals falling victim to criminal scammers significantly heightened since the outbreak of Coronavirus.

MyState Bank are urging Australians to exercise more caution online, with the risk of individuals falling victim to criminal scammers significantly heightened since the outbreak of COVID-19 (Coronavirus).

MyState Bank General Manager of Digital and Marketing, Heather McGovern, said the current environment is ripe for criminals looking to exploit the fear and anxiety around the virus itself, and its implications on an individual’s financial wellbeing.

“We are seeing many instances of neighbourhoods and communities coming together to support each other during these times,” she said. “However, there is also a dark side where criminals are using highly sophisticated scams to obtain personal information from members of the community, especially the most vulnerable amongst us.

“The most common ways fraudsters are trying to line their own pockets during this time is through phishing scams sent via email or text messages providing seemingly ‘official’ information about Coronavirus. The sender claims to be from government departments, health agencies such as the World Health Organisation (WHO) and even legitimate businesses in the travel and telecommunications sectors. In addition, phishing scams may be forwarded or shared via social media by a relative or friend in good faith, and we would urge people to be cautious of such forwarded information.

“These emails will often ask receivers to click on an attachment or embedded link which will likely download malicious software onto their device to allow scammers free reign over their personal information or financial data,” she said.

Other examples of scams include Coronavirus-inspired advertisements which more than often have a sense of urgency, encouraging the receiver to “Act Now.”

Following the announcement of the Government’s economic support package around early release of superannuation, there have also been instances of scammers attempting to get their hands on the super of unsuspecting victims or offering unnecessary services for a fee.

Australians should be aware there is no need to involve a third party or any fees involved in the early release of superannuation entitlements.

Ms McGovern said that Australians are being constantly overloaded with information from different sources during this time, making it difficult to determine what is legitimate and what is a potential scam.

“In line with our commitment to our core values, MyState Bank is focused on educating customers and the wider community to spot the warning signs of fraud and possible scams they may be targeted with.

“Keeping customer accounts secure is a top priority for us and we have invested heavily in the most comprehensive security measures for online banking, debit cards and ATMs in Australia,” she said.

According to the Australian Competition and Consumer Commission’s (ACCC) Scamwatch, there have been more than 90 reports of scams related to Coronavirus since 1 January 2020, with figures expected to further increase.

However, Ms McGovern said with more awareness we will likely see these numbers diminish.

“We are urging everyone to be on their guard and watch out for themselves and vulnerable family members, friends and neighbours who are at increased risk of becoming a target for fraudsters in these uncertain and challenging times, and we encourage customers to reach out to their banks for clarifications and support if needed” she said.

Tips to protect yourself, and others, from COVID-19-inspired scams:

• Beware of any online requests or unsolicited phone calls requesting personal or financial details. Remember it is highly unlikely that a government department or other legitimate businesses will ask for this sort of information via these channels.
• If you have received unsolicited contact and are unsure, look up the number of the organisation on their website and call to validate – don’t use the number provided in the message. If it is a scam, they will likely want to know too.
• Inspect all email addresses and links by hovering your mouse over the URL to see where it leads. If something looks suspicious, don’t click on it or provide any personal information. If in doubt, then check if it’s legitimate with the sender.
• Apply an eagle eye when inspecting emails for spelling, punctuation and grammatical errors.
• Receiving an email with a generic greeting such as “Dear Sir or Madam” is a huge giveaway that you are likely reading a phishing email – delete it!
• Report any suspicious behaviour to the relevant authorities including the Australian Securities Investment Commissions (ASIC) and ACCC. In fact, the ACCC’s Scamwatch is a good source of information to help you recognise and avoid scams, allowing you to subscribe for on-the-spot email alerts on the latest scams.
• Lastly, always ensure you get your updates on coronavirus from legitimate sources such as the WHO and the Australian Government Department of Health.

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Heather McGovern

Money is driving conflict, secrets and stress among Australian couples, according to new research from MyState Bank, which is urging all Australian couples to devote more time to working together on their finances this Valentine’s day.

The Love and Money Survey was commissioned by MyState Bank and surveyed over 1000 people in a relationship. While 62% of respondents say they discuss their finances with their partner at least monthly, 8% of respondents have never discussed their finances with their partner.

Commenting on the findings, Heather McGovern, MyState General Manager of Digital and Marketing said: “If you and your partner find yourselves fighting about money, you’re certainly not alone. The MyState Bank Love and Money survey reveals that most couples (55%) experience conflict and stress at least once a year and 19% of couples experience conflict and stress with their partner on a monthly basis.

“MyState Bank would love all Aussie couples to take positive steps this Valentine’s Day when it comes to their finances. Reducing stress and conflict caused by money worries can be as easy as sitting down with your partner and being open and honest about your financial situation and goals for the future.”

Spenders, savers and secrets

The MyState Bank research also revealed that in many relationships one person is a saver and the other a spender, which can also lead to conflict. The survey found that 71% of respondents classified themselves as a ‘saver’ while also classifying their partners as savers in 52% of cases.

Almost one in three Australians in a relationship (29%) admit that they have kept a financial secret from their partner and 32% have lied to their partner about the price of a purchase.

The MyState Bank Love and Money survey also found:

• 13% of people have a secret savings account
• 25% of people have separate accounts and don’t share expenses
• 26% of partners make all the financial decisions in the household

MyState Bank offers five tips to ease the money worries this Valentine’s Day:

1. Set up a regular ‘money date’: Put some time in your schedule to talk about your financial situation and future goals. Three quarters (75%) of respondents in the MyState Bank Love and Money survey reported that they have joint accounts and share expenses, while 68% of respondents also shared the financial decision making.
2. Keep a budget together: Keeping track of your spending with a budget is one of the most positive steps couples can take together to lift the burden of money worries. A good tip here is to be completely transparent about where your money is going and to work together to cut back on spending if you need to.
3. Plan for tomorrow:  In addition to a budget make sure you both clearly understand your financial goals and agree on any big purchases. This includes setting savings goals, plans for buying your first home (and how quickly you want to pay down your mortgage), how you might fund your childrens’ education and what your plans are for retirement.

It is important to write your goals down together, set a timeframe to reach those goals and regularly review them together every 3 months – as your goals may change as your personal circumstances change.

4. Avoid the blame game: It is important that you don’t blame each other. You should both take ownership of the situation and work on it together.
5. Seek help: Don’t wait for your financial fears to escalate. If your finances are causing stress and conflict in your relationship, it is important that you reach out and talk to your bank about your financial situation before things get too bad. MyState Bank offers a hardship assistance program for those in need. Remember, your finances can have a profound effect on many aspects of your life.

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Heather McGovern

As Australia heads towards a digital world, Australian parents are concerned about the impact a cashless society would have on their children, with 67% believing the shift to digital will leave their children financially worse off, according to new research from MyState Bank.

MyState Bank says a ‘cashless society’ refers to a society where cash is not generally used or an accepted as a means of payment. While notes and coins will still exist in the near future, you won’t be able to use them in the practical sense and the preferred method will be digital.

The research found over half of parents think it is easy or very easy for children to misuse digital payments when compared to cash.

In fact, a third of parents say their children have spent money without permission via digital services such as apps, in-app purchases, eBay, UberEats or downloading music and games.

Commenting on the findings, MyState Bank’s General Manager Digital and Marketing, Heather McGovern said: “In Australia, we have had an extremely fast adoption of online technologies. However, the overwhelming feeling from parents is that as money becomes less tangible, there is a need to help children understand the value of money and spend responsibly.

“Small purchases can add up fast when spending is unseen and there is a clear need to educate children on this issue.”

The study found parents are most concerned about children spending too easily (83%), not knowing the value of money (76%), having access to easy credit such as ‘buy now, pay later’ services (65%) and being vulnerable to financial scams (54%).

Plugging the education gap

Positively, MyState Bank’s research signalled that Australia’s children have a reasonable understanding of financial concepts. Overall 65% of parents say their children understand the concept of debt, 72% know about overspending and 90% have a grasp of what saving means.

However, two thirds of parents believe the shift to a cashless society is making it more difficult to understand these concepts.

“Our findings suggest that Australian parents are talking to their children about the basics of money management but that the need for financial education initiatives is increasing as we use cash less and less,” Ms McGovern said.

The vast majority of parents (98%) believe schools should have financial literacy programs as part of their curriculum. However, just 31% said their children had participated in a financial literacy program at school.

“Managing money is an important life skill, and we believe there is a strong case for financial education to be more widely available,” Ms McGovern said.

“Whether it is teaching a younger child how to save or budget or helping an older child to learn about wealth creation, it is important that we keep talking to young people about money so they can feel confident about the future.

“As a mother of two young children this is something I feel strongly about, along with MyState Bank, and we will continue to look for ways to help educate our nation’s youth on this important issue.”

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Heather McGovern

Gift givers should ditch cliché gifts like socks, wine and clothes this Father’s Day, with new research by MyState Bank revealing nine in 10 Aussie Dad’s put a family experience at the top of their wish list.

The survey of 1,001 Australians commissioned by MyState Bank revealed that a huge 48% of Dad’s have received a Father’s Day gift they would consider a waste of money, while half of dads received a gift they have never used.

MyState Bank’s analysis also found Australians are planning to spend an average of $90 on Father’s Day this year, with 15% of respondents saying they are planning to spend more on Father’s Day compared to last year.

MyState Bank’s General Manager Digital and Marketing, Heather McGovern, said, “For those who would like to buy a gift for their Dads this year, consider it carefully to avoid splashing out on something that is likely to end up being returned or shoved at the back of the wardrobe.

“Our research shows that the most impactful gifts are priceless and free,” added Ms McGovern.

The research also highlighted Australians find Dad’s harder to buy for, with almost 6 in 10 admitting they find it hard or very hard to find a gift their dad will appreciate.

Clothes (31%), alcohol (30%), and gift cards (27%) are amongst the most popular gift ideas for Father’s Day this year, according to the MyState Bank research.

Interestingly, unique experiences like a skydiving session or cooking class came in as the least popular gift ideas for Dad.

Ms McGovern concluded, “This Father’s Day, really focus on spending time together and having fun as a family.”

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