A lack of financial knowledge is contributing to one in two younger Australians feeling anxious about their finances, new research shows.
Survey data released by Findex showed that one in two Australians under the age of 25 do not feel in control of their finances.
With a lack of formal financial education in the school system, these stressed-out Australians are turning to mum and dad for financial advice.
Findex’s chief financial officer, Matt Games, noted that sound financial advice is strongly linked to improved financial wellbeing and greater participation in economic life.
“Participation in economic life affects quality of life, the opportunities that people can pursue, their sense of security, and the overall economic health of society,” he said.
“That’s why it’s essential we do everything we can to educate and empower our communities on how to be smart with their finances.”
With a lack of formal education and struggling to budget, younger Australians are still saving for medium-term goals, including a new car and long-haul holidays, the research finds.
“While there are some encouraging signs in the data that younger Australians are financially savvy, there are also some real areas for concern. While half of young Australians feel in control of their finances, this means almost one in two feels in the dark,” Mr Games said.
Mr Games noted that a reliance on parents and guardians could be potentially harmful for young Australians, urging governments to make it part of formal education.
“It’s a shame that young people are still reporting that financial education is not featuring on the school syllabus,” he said.
“Our data shows young Australians are turning to banks, finance companies or searching online for financial advice to fill in the gaps in their knowledge. Banks and finance companies should take their responsibility as a source of financial advice seriously and ensure they’re providing easily understandable and objective financial guidance.”
Despite never receiving any formal education at school, Nicholas believed he knew money was important, setting himself the goal of saving $100,000 by his 21st birthday.
Growing up in Far West Sydney, Nicholas said financial education wasn’t on his school curriculum, so he sought out this information himself.
“Lots of people turn to their parents for financial advice, but I learnt early on that mine didn’t always have the best financial habits,” he said.
“They would often buy new things unnecessarily, throw out items that were still in good condition, or not compare products and services before purchasing to make sure they were getting the best deal. Instead, I turned to experts online.”
Nicholas said age is the young Australians’ biggest advantage.
“Being young is the biggest advantage. My advice to young Australians wanting to achieve greater financial freedom is to start small and start now. It all adds up, everything from saving a little bit to learning the basics of tax and super.”
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Article courtesy of Nestegg.