- A third of young women (under 30s) rated their financial literacy as ‘fair’ or ‘poor’
- 3 in 4 Australians believe they have ‘good’ to ‘excellent’ financial literacy, but figure could mask over or under confidence in their understanding
- Financial hardship highest amongst 18-29-year-olds (56%) and trends downwards as people get older
Younger Australians are reporting lower financial literacy levels alongside a greater risk of financial hardship, according to new NAB research.
Data revealed that while 3 in 4 Australians (75%) believe they have ‘good’ to ‘excellent’ financial literacy, the number of people who reported experiencing some form of financial hardship in the last three months has risen for the sixth consecutive quarter to 44%.
NAB Head of Customer Vulnerability, Michael Chambers, said many people are one unexpected life event away from financial hardship.
“While NAB customers are broadly in good shape, 1 in 4 Australians say they don’t have enough money for an emergency. With rising interest rates and increased cost of living, people’s financial literacy and understanding of their financial situation is being tested,” Mr Chambers said.
“Financial literacy is about more than being able to put together a budget, it extends to understanding how to manage a credit card to your advantage and being able to figure out the best way to make big purchases happen. Research shows that people being over-confident in their financial understanding can be just as problematic as not having basic knowledge in the first place.”
NAB’s Financial Hardship survey revealed men aged 50-64 (82%) and women over 65 years old (81%) had the highest self-reported financial literacy. The largest gap in financial understanding was in women aged 18-29, with 3 in 10 (31%) rating their financial literacy ‘fair’ or ‘poor’, significantly higher than any other group.
“The most important thing to remember is there is no such thing as a silly question when it comes to finance. Banks have an obligation to explain things in simple language so people should feel confident about asking as many questions as they need until they feel comfortable,” Mr Chambers said.
“There is also a huge amount of information out there these days from podcasts to online budgeting tools and books – I’ve kicked things off with my kids with ‘The Barefoot Investor for kids’ and it’s been a great start.”
In the past three months, 1.5 million customers have checked their spending categories in the NAB app and Internet Banking, representing a 62% growth over the previous quarter.
NAB provides customers in hardship various tools and support options through NAB Assist, including loan restructures, referrals to financial counsellors and access to No Interest Loans through our partnership with Good Shepherd.
