A new study measuring ‘financial consciousness’ saw Gen Zeds (18 – 24 year olds) achieve the lowest score of all age groups, barely scraping a pass with a mediocre 46 out of 100 (45 was the pass mark). Furthermore, when questioned about their financial ‘safety net’, nearly a quarter (22 per cent) said that if they were suddenly out of work then they could only survive for up to a month.
Worryingly, there is a direct relationship between low test scores and poor financial wellbeing overall. Over half a million 18 – 24 year olds across Australia would only be able to survive financially for a month if they were suddenly out of work. Nearly one quarter (22 per cent) said they would have to rely on family and friends to cope, and 16 per cent said they would turn to government handouts to keep themselves afloat.
Comparethemarket.com.au General Manager of Banking, Rod Attrill said: “Age matters when it comes to finances. Typically, young people do not have exposure to financial products, such as home loans, which would encourage them to pay closer attention to their finances, meaning they often fall short in their ability to manage their money now in a bid to improve their future financial position.
“Determining a person’s ‘financial consciousness’ can help form decision makers’ views on how to tackle much broader public policy problems. If young people do not feel empowered or able to improve their financial situation, then this has obvious effects on the future economic health of the nation as a whole.”
The Financial Consciousness Index (FCI), which was commissioned by comparethemarket.com.au and developed by Deloitte Access Economics, tested 3,000 individuals nationally to uncover their ability, willingness and sophistication to make a change to improve their financial wellbeing.
Results were weighted for a score out of 100, placing them into one of five groupings associated with different levels of financial consciousness. Scoring less than 35 placed respondents in the lowest category: ‘Don’t know what they don’t know’, whereas scoring between 35 and 45 saw them in ‘It’s a blur’. The average Aussie is deemed ‘Conscious’ by scoring between 45 and 55. Those ‘Rising up the ranks’ scored between 55 and 70, and the ‘Financially Enlightened’ scored over 70 points.
Major contributing factors that affected a person’s FCI score include their age, income, gender, location, education, and whether or not they own their own home.
On average, Gen Zeds performed most poorly scoring 46 out of 100 – meaning they just scraped through into the ‘Conscious’ category. Gen Ys (25 – 34 year olds) fared better scoring a respectable 51.6, slightly ahead of the national average of 51.2 out of 100. The only other age group to score less than half marks were 70 years and over, scoring an average of 47.8.
“There is a clear relationship between people’s FCI score and their overall financial wellbeing and sentiment. Worryingly, many Gen Zeds have concerns about holding down a job, with 34 per cent of respondents saying they either worry or feel very little job security. Also looking back, 27 per cent of Gen Zeds said they are now less confident in their ability to retire comfortably at 65 compared to this time last year.
“By commissioning this report, we hope to capture the attention of a range of stakeholders, including consumers, businesses, and public policy makers. Undoubtedly, we feel it demonstrates that many young Australians need greater education, empowerment and understanding to enable them to take tighter control of their everyday finances,” said Rod.
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 The Financial Consciousness Index (FCI), which was commissioned by comparethemarket.com.au and developed by Deloitte Access Economics, tested 3,000 individuals’ belief in their ability to influence their financial outcomes, as well as their willingness and sophistication to make a change to improve their financial wellbeing.
 This figure represents 22% of the estimated Gen Zed resident population as at December 2017, ABS