Aussies say debt is making us sick
Debt and financial worries are making us sick, with one in four Australians saying financial stress is impacting their health.
The alarming statistic was revealed in an independent survey of around 2,000 Australians, conducted by Enhance Research over a two-week period earlier this month. And the financial stress and burden is not being shared equally. Millennials were much more likely to report that financial worry was affecting their health, with a worrying 37 per cent linking the two.
Australia’s largest credit union, Great Southern Bank, commissioned the research to better understand how consumers are feeling about debt as they look ahead to 2019, particularly following the traditional spending splurge that coincides with the festive season.
Great Southern Bank Head of Communications and Community Nicole Pedwell said the trend was concerning and showed there was a clear link between people’s financial situation and their health.
“The start of a new year is a common time for people to reassess what is working well and what needs improvement in their life – everything from their finances to relationships, health, their career and even time management,” she said.
“When people realise one area of their life is adversely impacting another – like financial pressure starts to impact on their health or relationships – that can often be the catalyst to start making changes.”
The survey also provided some insight into why people are feeling so uneasy, with only one in five Australians saying they felt completely in control of their finances. Around 7 per cent said they expected to take more than six months to repay the credit card debt they accumulated over the Christmas-New Year period, while a further 6 per cent said they did not expect to ever pay off their credit card entirely, opting instead to roll over the balance each month and incur interest.
“What is positive to see is that more than half of those surveyed have resolved to make changes to improve their debt position in 2019. The most common resolutions were to reduce spending and pay down debts, set up a weekly savings plan, develop a household budget, and spend less money next Christmas.”
Ms Pedwell said for many people, the starting point to improve their financial wellbeing was to educate themselves about money and improve their financial literacy.
“Most people with a credit card didn’t know the exact interest rate they are paying on the card, and we saw a similar theme for those with personal loans. Unless you know what interest rate you are paying now, you can’t make a well-informed decision on whether it is worth shopping around for a better deal,” she said.
Ms Pedwell said many consumers focus more on the dollar amount they are repaying per week towards their debts, rather than drilling down to see how much of that amount is coming off the principal, or the outstanding balance.
“It’s important that people shift their thinking if they want to improve their financial health. One in five said that they find it hard to make progress on paying down their debt, but getting ahead financially can require a real commitment to make changes,” Ms Pedwell said.
She encouraged consumers looking to improve their financial situation and get debts under control in 2019 to seek advice on what would work best for their personal situation.
“Every individual’s circumstances will be different, so it’s important to chat to someone about your situation, your goals and the best options to get you there.
“Don’t be afraid to ask for help. Organisations like Great Southern Bank have a range of options available to support our members through difficult times in their life or to plan for the unexpected. More broadly, we are also working closely with a range of community organisations across Australia to help improve financial wellbeing in the community and this will continue to be a key focus for us moving forward.”
For more information about Great Southern Bank’s financial products and services, including how to chat to a personal banker via the iM CUA smartphone app, visit www.GreatSouthernBank.com.au