Financial Consciousness is a term coined by Compare the Market and Deloitte Access Economics, which provides a broad measure and understanding of how a person views the degree of control they feel they have over their financial outcomes, their willingness and capability to make financial decisions, and their overall financial sophistication, which means the diversity and type of financial products they own.
Your financial consciousness score is important as it gives a comprehensive view of your financial understanding and therefore indicates your ability to change and improve your financial situation.
By taking steps to improve your financial consciousness, you are demonstrating a greater willingness to make changes to your finances and therefore will be better able to lead the life you want, supported by a more robust financial position.
There are a number of characteristics that tend to influence a person’s financial consciousness score:
Rather than just point out that many Australians have low financial consciousness and do not believe that it is within their control to improve their future financial outcomes, we wanted to provide people with the information and confidence they need to improve their relationship with money.
We commissioned an independent financial advisor to write a money self-help book called Money made Simples, which in a friendly and non-judgmental way, takes people through simples steps to help them improve their finances and go after what they want in life.
We have created a range of tools, tips and content to help empower people to reach their money goals more quickly. Our Budgeting Calculator and Savings Tips Generator can be found here. Our blog – The Burrow – contains a range of articles and guides on everything from the best times to fill up your car, tips on how to reduce your energy bill and cheap but effective home workout ideas.
Also, our comparison service enables consumers to compare and 1000+ products from 100+ brands to see if savings can be made across a range of household products and services, including energy plans, home loans and even petrol.
We do also hope that this report captures the attention of a range of stakeholders, including public policymakers, as we believe it demonstrates that more investment is necessary to educate and empower Australians to take tighter control of their everyday finances.
Often, yes. When you first purchased an insurance product, you likely opted for a policy that had the right inclusions and price tag for you. Over time, your personal circumstances may have changed or the introductory offer given by your insurer may have expired, potentially leaving you with an ill-suited or overpriced product.
It can be as simple as comparing your options to see if you could save by switching. The savings don’t stop at insurance either. You can compare 1000+ products from 100+ brands at Compare the Market to save across a range of household products and services, including energy plans, home loans and even petrol. Is financial consciousness the same as financial literacy? No. The Australian government defines financial literacy as: ‘A combination of financial knowledge, skills, attitudes and behaviours necessary to make sound financial decisions, based on personal circumstances, to improve financial well-being.’
No. The Australian government defines financial literacy as: ‘A combination of financial knowledge, skills, attitudes and behaviours necessary to make sound finanacial decisions, based on personal circumstances, to improve financial well-being.’
Whereas ‘financial consciousness’ is a term coined by Compare the Market and Deloitte Access Economics, which provides a broader measure and understanding of how a person views the degree of control they feel they have over their financial outcomes, as well as their willingness and capability to make financial decisions, and their overall financial sophistication, which means the diversity and type of financial products they own.
While having a weekly or monthly budget does contribute to you meeting the threshold of basic financial consciousness, there is still room for improvement. After all, these are only short-term solutions. Creating an annual budget and financial plan for the year ahead – and acting on it – speaks to a person’s financial willingness, and how motivated and active they are in their financial decision making. The ability to make financial goals and plans – and stick to them – is a behaviour held by people who fall in the ‘rising up the ranks’ category.
If you haven’t already, you should look at creating and sticking to a 12-month financial plan. This can help you prove to yourself that you are capable of designing a life you’re excited about, and kick some serious money goals along the way.
When it comes to longer term financial plans (think three to five years and beyond) it’s those in the coveted ‘enlightened’ category who have this mastered – and you can bet that they also have weekly or monthly budgets to go with it.
The Financial Consciousness Index score was developed as part of an annual report that tested over 3,000 individuals to see whether they are conscious of their ability to affect their own financial outcomes, their willingness to act, and the extent to which they are able to participate in sophisticated financial matters.
If you have a spare 10 or so minutes and would like to find out how your score compares to other people around the country, then you can read the full 2020 report here. You’ll find a lot more detail on the Index itself and what financial consciousness means to Australians’ overall financial wellbeing.
Otherwise, we would be happy to send you more information on your score directly. Simply click here.