News

New measure shows link between Australians' health and financial management

12 March 2019

The way people handle their money is having a significant impact on the health of Australians according to a new benchmark measure of financial wellbeing.

New research from the Commonwealth Bank and Melbourne Institute has measured financial wellbeing in an attempt to get a snapshot of the health of Australians.

Causing the most anxiety is the challenge of managing personal finances and being able to put enough money aside to ensure financial futures.

The CBA-MI Financial Wellbeing Scales include both self-reported and observed scales, that is, people’s own perceptions of their own financial outcomes and banking data.

Financial wellbeing in the research is achieved when people meet financial obligations, have the financial freedom to make choice to enjoy life, have control of their finances and have financial security now, in the future and in unforseen circumstances.

In the research, around a third of Australians said they were not on track to secure their financial future, and sadly around a quarter said they did not enjoy life because of the way they are managing their money.

Other key findings from the research were:

29% said their lives were often or always controlled by their finances

33% had low financial resilience

31% had a low savings balance

37% said they couldn’t handle a major unexpected expense

Pete Steele is the CBA’s executive general manager of digital and spoke to The Adviser about the research.

“Financial wellbeing is a complex issue,” he said.

“The Scales research is a significant contribution to the conversations about what financial wellbeing means in Australia.”

“We have an ambitious purpose to improve the financial wellbeing of our customers and communities, but we know there’s no ‘one-size-fits-all’ approach to financial wellbeing.”

Melbourne Institute’s David Ribar said the Financial Wellbeing Scale could be used by policymakers, financial institutions, service providers, researchers and you, the public.

“By combining both self-reported financial wellbeing data and objectively observed measures, the Scales provides dimensions of understanding that represents a first in its field, internationally,” he told The Adviser.

Latest

The best thing you might want to do if investing in commercial property is assemble a ‘dream team’ of experienced operators that understand the process and understand why you are investing.

Read more

Mortgage Professional Australia has announced that Perry Finance Director and Melbourne Finance & Equity Group CEO Cameron Perry is one of MPA’s Top Ranked Commercial Brokers of 2022.

Read more

Prospective home buyers and investors are being warned to temper their expectations as the dust settles on the Reserve Bank’s first interest rate rise in years.

Read more

The Reserve Bank this week pulled the trigger on interest rates as expected, hiking the official cash rate by 25 basis points to 0.35 per cent.

Read more