The A-Z of Money Confidence

ANZ and Pacific Magazines asked almost 12,000 Australians how they think and feel about money matters. 9 in 10 said they have a financial fear*, but most people with low money confidence plan to do nothing about it. We're committed to helping you take control of your money worries. The 'A-Z of Money Confidence' includes 26 steps you could take now to get ahead, get some sleep and make the most of your money. It all starts with an A-Z Review®.

A

is for ask for help.

A is for ask for help.

While most people say they have a financial fear, 83% of those who aren’t confident either procrastinate (58%) or simply try not to think about it (25%).

If you're stressed about money, chances are you'd rather go for a run or talk to your partner than ask an expert for help. Our Australia's Money Confidence 2013 research shows 93% of Australians currently feel some level of financial stress, and in response:

  • 37% talk to their partner
  • 33% exercise
  • 15% do nothing

Only 11% talk with an expert to alleviate financial stress, yet doing so can help you become more confident, less stressed and more likely to be financially successful.

Happily, with the right information, finding an expert to ask is not so hard.


B

is for build a better budget.

B is for build a better budget.

Budgeting is 'the new black' - people with high money confidence are more likely to have a budget and stick to it. It's also no coincidence that people considered 'affluent' have plans in place to achieve their financial goals.

However, many still find budgeting and saving difficult.

  • More than half don't have a budget but think they should (52%)
  • Less than 1 in 2 feels very confident with budgeting (46%)
  • 34% say they are more a spender than a saver
  • 48% of people aged 35-49 struggle to put money aside after paying the bills
  • 32% of people with low money confidence regularly spend more than they earn, compared to 4% of those with high money confidence

Whether you've never had a budget, or have one you feel could be improved on, there are steps you can take to help build a better budget, stop money leaks and improve your money confidence.


C

is for consolidate your debt.

C is for consolidate your debt.

Of all money worries, debt appears to have the greatest impact on people's lives, affecting:

  • Happiness (7 in 10 people)
  • Social life (2 in 3 people)
  • Health (3 in 5 people)
  • Career (1 in 2 people), and
  • Relationships (1 in 2 people).

So have you ever thought about other lending options to help reduce your debt faster? It may sound a little odd, but depending on your circumstances, it's one strategy that could really work for you - make sure you talk to an expert first.

Many Australians will go into debt to buy their first home, and money confident people seem to understand that using credit wisely can also help save you money - but when used the wrong way it can be debilitating.

67% of people with low money confidence are uncomfortable with the amount of money they owe, while on the flipside, 67% of those with high money confidence are comfortable with their debt levels.

Take action now to help alleviate your debt stress.


All applications for credit are subject to ANZ's credit approval criteria. Fees and charges apply.

D

is for develop plans to achieve your money goals.

D is for develop a plan to achieve your money goals.

89% of those with high money confidence have a plan to achieve their goals. However for those with low money confidence, the figure shrinks to just 14%.

As the saying goes, when you aim at nothing, you'll most likely get it. So whether your dream is to retire early, buy a home or start your own business, establishing a plan is the first step to help make your plans real.

  • 36% of Australians think they need a plan, but put it off
  • 13% don't even think about it
  • 1% hope to find a rich partner

For the 99% looking to take control of your own destiny, today is the day to start developing your plan.


All applications for credit are subject to ANZ's credit approval criteria. Terms and conditions, fees and charges apply.

E

is for educate yourself about money matters.

E is for educate yourself about money matters.

"Everybody's ignorant, only on different subjects" - Will Rogers (comedian and social commentator 1879-1935).

People who feel and behave confidently with money tend to stay informed – taking an active interest in developing their financial knowledge, and seeking expert information and professional advice when needed.

So while you don't need to be a financial expert, the more you know about money, the more confident you will become. Significantly, 91% of people with high money confidence say they stay informed of financial matters compared to 60% of those with low money confidence. Lower money confidence can also lead to stress and procrastination:

  • 44% find dealing with money stressful
  • 39% worry about money even when things are going well
  • 23% believe nothing they do will make a difference

We know that a little research and a conversation can help, but when it comes to getting advice, mum doesn't always know best. Yet 24% of us talk to our family and friends for answers while less than one in five (18%) turn to their bank for financial tips, tools and advice – perhaps they don't know they can.


F

is for fund your family's future.

F is for fund your family's future.

If your family counts on you, research shows you're likely to have lower levels of money confidence and worry more than the general population . Whether you want to accommodate a growing family, pay the school fees or care for aging relatives, you'll have a range of options and decisions to mull over – and you may be losing sleep*.

33% of people stressed by money have trouble sleeping and Australians aged 35-49 say financial issues caused by raising children are among their top 3 causes of stress.

But there are four key things that can make a the difference:

  • Being in control of your finances
  • Planning for the future
  • Staying informed
  • Being financially motivated

10 years can go by in a flash, but if you plan ahead and start saving now; you might find you can also get your sleep back.


G

is for give yourself a head start.

G is for give yourself a head start.

If you're at uni or just starting in the workforce, chances are you think there's not a lot of help out there. Young people can face credit challenges, bill shock and an increasingly complex world of financial management:

  • 96% of people aged 18-24 are experiencing some level of financial stress, while 90% think about budgeting, only 50% say they have a budget
  • Only 28% have a good understanding about super
  • 31% of people aged 18-24 and 26% of 25-34s say they reduce their healthy lifestyle habits when under financial stress

Whether you are travelling, moving out of home, establishing your career or a long term relationship, you could get on top of financial stress by educating yourself or speaking with a money expert


H

is for have a home loan health check.

H is for have a home loan health check.

Do you feel anxious, have trouble sleeping or suffer mood swings? For around 25% of Australians, it's our mortgage causing us the greatest stress, and of these*:

  • 39% are anxious
  • 33% have difficulty sleeping
  • 20% suffer mood swings

If you've ever asked yourself if your home loan could be working better or if you could be debt free sooner, make sure you ask your bank too. A healthy home loan is more than a good interest rate, and sometimes paying down other debts could be a smarter way to manage money and investments for the longer term.

Ask Australia's Home Loan Lender of the Year# to review your current set-up to see if it fits your evolving lifestyle needs and goals.


#CANNEX Money magazine's Home Loan Lender of the Year 2012, 2010, 2008, 2007, 2006, 2005. CANNEX Personal Investor magazine's Home Lender of the Year 2005, 2004, 2002, 2001, 2000, 1999.

All applications for credit are subject to ANZ's credit approval criteria. Terms and conditions, fees and charges apply.

I

is for invest with greater confidence.

I is for invest with greater confidence.

We can't all be like Warren Buffet^ – but given investing can be the key to building long term financial independence, we shouldn't let a lack of confidence be the thing that holds us back.

However that is exactly what many of us do*. For example:

  • Almost 90% of us say that saving and investing for the future is a priority (but only 11% consult a financial expert to help develop their plan)
  • 52% say dealing with money is stressful and overwhelming

Compare those with money confidence to everyone else:

  • 36% of money confident investors own shares, compared to 22% of those with lower money confidence
  • 68% of money confident investors enjoy thinking about how to invest compared to 48% of those with lower money confidence

Building your own knowledge could help you make more confident decisions – start with the links below and get in touch with an expert to learn more about investing more successfully.


^Source: Wikipedia – Warren Buffet is an American business magnate, investor, and philanthropist who is widely considered the most successful investor of the 20th century.

J

is for jump-start your savings.

J is for jump-start your savings.

If the journey of a thousand miles starts with the first step, why are so many of us standing still?

Research shows that those with a plan are more money confident and less stressed - 80% of people with high money confidence say they have a savings plan they stick to*.

One of the biggest surprises in our latest research is that while there is no significant difference in the household income and average borrowings of people who consider themselves 'savers' or 'spenders', the 'savers' have on average 2.4 times more in savings than 'spenders'.

It seems a number of Australians lack confidence to begin their savings journey:

  • 36% don't have a savings plan, which lifts to 50% of those with low money confidence
  • While 30% say they couldn't survive financially for even three months if they lost their income, 23% feel nothing they do will make a difference to their situation

The good news is you've already taken the first step, so don't stop now.


K

is for know your risk profile.

K is for know your risk profile.

Even if you're a champion skydiver, like to swim with sharks or race motorbikes, it doesn't necessarily mean you'd be comfortable to have your money flirting with disaster in a high-risk venture... After all, you might need it for medical bills.

However, sometimes we avoid making the right choice because we don't fully understand our risk profile. Research shows*:

  • Confident women are still less likely to invest in shares than men (29% women vs 41% men)
  • Men are most likely to worry about making the wrong investment decisions (17% men vs 12% women)
  • For those aged 25-34, the biggest financial fear is not being able to build future financial security
  • 91% of money confident people believe investing for retirement is a priority

Your personal risk profile is the crossroad where acceptable risk meets the reward. Over time, your investment choices will most likely evolve and being clear about what you want can help you choose the right strategy and sleep soundly.


L

is for look for the right advice.

L is for look for the right advice.

At every stage of life, we encounter major events that are a cause for great celebration, and sometimes also financial concern. For example:

  • 60% of couples have had a disagreement over money, and 3 in 5 engaged couples argue (vs. 1 in 2 married couples)
  • 77% of young mums are experiencing financial stress
  • 34% of people aged between 25-34 fear they may not be able to support their family

Whatever is happening in your life right now, a chat to Beryl next door won't always offer you the best answer.

Finding the right type of expert at the right time is important, and those who seek financial advice can often achieve their goals faster.


M

is for manage your money, your way.

M is for manage your money, your way.

Often it's the little things that make a big difference, and the same can be said for your everyday banking. Things like convenience and knowing you can access your money how and when you want can be essential – something that money confident people understand:

  • 74% of people with low money confidence say dealing with money is stressful and overwhelming
  • 82% of people with high money confidence disagree

Managing money to suit your life is about more than just saving, budgeting and investing. For example, linking transaction, savings and credit card accounts can simplify your everyday banking and help to minimise fees. Online and mobile technology makes banking easier with the flexibility to manage your money, your way, plus security measures like ANZ Falcon™ can give you peace of mind.


All applications for credit are subject to ANZ’s credit approval criteria. Terms and conditions, fees and charges apply.

N

is for navigate to ANZ before you travel.

N is for navigate to ANZ before you travel.

There's nothing quite like a holiday to clear the head and re-charge the batteries. But sadly, some people who could use a break just aren't taking one.

  • 45% of people suffering financial stress have delayed taking a holiday
  • 7% have delayed getting married (so the honeymoon is out as well)

If this sounds like you, then some of the steps we've examined in our A-Z of Money Confidence may help as well the tips below.

And if you're one of a growing number of Australians looking to head overseas this year, take a trip to ANZ to get your travel money sorted first – it could save you money.


O

is for own your home.

O is for own your home.

86% of us believe that owning our own home is still the great Australian dream. But is it easier or harder to achieve this goal in today’s economic environment? And does your money confidence make a difference?

When asked to respond to the statement: 'It is not as achievable as it used to be to own your own home.'

  • 85% of those with low money confidence agreed
  • Only 67% of those with high money confidence agreed

This is statistically significant, especially since perception often becomes your reality.

There are steps you could take to own your own home and building your money confidence can be one of them. You can also use an online savings account with a higher interest rate to help you save for your deposit.

If you’re already a home-owner, find out if your home loan is working as well as it could be with a complimentary home loan health check.


All applications for credit are subject to ANZ’s credit approval criteria. Terms and conditions, fees and charges apply.

P

is for protect the things that matter.

P is for protect the things that matter.

The fact is life can be unpredictable: illness, divorce, redundancy and death of a loved one can impact us all. If you are unprepared, such events can devastate your finances according to research conducted by the University of Canberra^:

  • 95% of families do not have adequate insurance
  • 1 in 5 families will be impacted by an event that renders a parent unable to work
  • The typical Australian family would lose half its income due to a serious illness, injury or death of a parent

In our recent survey*, almost 30% of people said they couldn’t survive financially for even three months if they lost their income.

Some things just shouldn’t be left to chance and while being prepared won’t guarantee you avoid life’s uncertainties, it can help you get through them.

Our research shows people who carry insurance are more likely to have medium to high levels of money confidence; and this goes beyond physical assets such as their home and car.


^Source:– The Lifewise / NATSEM Underinsurance report.

Q

is for question your banking.

Q is for question your banking.

We've all heard the phrase, "If it's not broke, don't fix it." Hopefully whoever said that first wasn't talking about banking.

Things change, and this is true not only in your life but also at your local bank. If it's been a while since you last reviewed your everyday banking products, investments and insurances, you may find you don't have the right set up for your needs and as a result you may be missing out on savings.

  • 75% of people believe their debt, savings and investments could be performing better, but less than 20% do anything about it
  • Only 18% ask their bank for help

People with money confidence are more likely to take steps to address the situation.


R

is for rethink retirement readiness.

R is for rethink retirement readiness.

88% of us believe that saving and investing for retirement is a priority, and this makes sense - as a nation, we are living longer so we also want to ensure we live well.

However, while 84% say it’s important to have a long-term plan, the majority of us don’t. And people approaching retirement feel they have suffered most as a result of the Global Financial Crisis (GFC)*:

  • 30% of people aged 50-64 say the GFC has impacted their retirement plans
  • 46% say they are not confident they will have adequate funds for retirement
  • 25% of 50-64 year olds fear not being able to retire when they want

Did you know the average Australian will need an income of around $40,297 p.a. to finance a 'comfortable' retirement – and couples $55,080 p.a.? That means accumulating savings of at least $430,000 by age 65 if you’re single, or $510,000 for couples (in today’s dollars) assuming you’ll receive a part Age Pension, you own your own home outright and you will live to an average life expectancy of about 85#. Are you on track? We can help.


#Source: Australian Securities and Investments Commission moneysmart.gov.au

S

is for sort out your Super.

S is for sort out your Super.

If more than $17 billion^ fell from your pocket, do you think you’d notice?

At last count, that’s how much lost super Australians have (some of it could be yours), and many of us also have multiple accounts, which means paying multiple fees.

Our Australia’s Money Confidence 2013 research reveals*:

  • 58% of women and 37% of men rate their understanding of super as poor or fair
  • 36% of us are not confident in managing super
  • Only 13% are very or extremely confident about having adequate funds for retirement, with men more confident than women (16% vs 9%)
  • For the majority the amount of super we think we need is 32% higher than what we expect to have, and the gap is even greater for women (52%). The average amount of super all respondents think they will need to fund their retirement is $894,726, while the amount they expect to have is $678,862

Super shouldn’t be forgotten – it’s almost 10% of every dollar you earn# and it’s your money. Doing something about it can be easier than you think.


^Source:
http://ministers.treasury.gov.au/DisplayDocs.aspx?doc=pressreleases/2012/043.htm&pageID=003&min=brs&Year=&DocType

#Source: Australian Government
http://www.futuretax.gov.au/content/Content.aspx?doc=FactSheets/super_guarantee_rate_to_12_percent.htm

T

is for take control of business cash flow.

T is for take control of business cash flow.

First the good news: Small Business owners have above-average# money confidence, and one reason may be they are more likely to 'do something' when faced with financial stress.

However 63% report moderate to very high financial stress and say their business can feel out of control – as a result^:

  • 33% have trouble sleeping
  • 48% fear not having enough money in the future
  • 32% fear losing money due to government or economic factors outside their control
  • 27% fear they will be unable to maintain their lifestyle

Good cash flow management means knowing ahead of time when cash might be tight, and having a solution ready – like contributing more of your own money, borrowing money, or arranging an overdraft with the bank.

Cash flow, loans, invoices... don't let the money side of your business take over.

An A-Z Review® with a Small Business Specialist can help you take charge, and you can also access free offers, practical advice and business templates via The Small Business Hub, powered by ANZ.


#The average money confidence score for all people aged 18 years and over is 48.9 out of a possible score of 100.

^1,160 Small Business Owners participated in Australia’s Money Confidence 2013 – The State of the Nation Report by ANZ and Pacific Magazines.

U

is for understand financial planning.

U is for understand financial planning.

You know you need a long-term financial plan, but you haven't seen a financial planner… If that sounds like you, join the crowd: 84% of Australian know they need a plan to achieve their long term goals, but only 22% have met with a specialist financial planner.

Further, 23% feel nothing they do will make a difference to their situation yet when you look at the results, is makes sense to talk to an expert:

  • 76% of people who use a planner are confident managing investments, compared to 55% who don't
  • 80% who use a planner are confident in managing their plan, compared to 55% for those who don't

Ironically, those who lack confidence in investing and financial planning are arguably even more in need of professional advice when it comes to sorting out their annual budget, debts, investments, and insurances.

Understanding how financial planning works can be the first step to building a plan that help you achieve both your short and long term goals.

Financial planning has changed for the better, and so could your financial future.


V

is for value your independence.

V is for value your independence.

Most people would like to think that at some point in their lives they will be financially independent. This means no longer having to rely on employment, other people or the government to fund your day-to-day living.

Fortunately only 1% of us think ‘choosing the right partner' is the best way to secure our financial future and independence!

However the research shows women^ in particular are less likely to plan ahead and suffer the consequences*:

  • 28% of women have low money confidence, compared to 19% of men
  • 54% feel insecure and stressed, compared to 46% of men
  • 15% of women are very confident managing investments, compared to 24% of men
  • When taking time out of the workforce to raise children, women are also left with less superannuation#, indeed on average, women retire with $35,000 less super than men#
  • 38% of women know they should have a plan but keep putting it off, compared to 34% of men
  • Only 57% of women feel they are financially secure, compared to 62% of men

When you’re juggling lots of things, it’s often easier to focus on what’s urgent and put off planning ahead. But you could find a balance and asking for help can be the first step.


#Source: MoneySmart.gov.au
https://www.moneysmart.gov.au/tools-and-resources/information-for/women/superannuation-and-women

^7,814 women participated in Australia’s Money Confidence 2013 – The State of the Nation Report by ANZ and Pacific Magazines.

W

is for work for yourself.

W is for work for yourself.

Why wouldn’t you want to work for yourself? At last count, Australians were running more than 2 million small businesses, accounting for 96% of all business^ in our country.

Our Australia’s Money Confidence 2013 research also shows 78% of small business owners have medium to high money confidence, which comes as no surprise – it takes a lot of confidence and an entrepreneurial spirit to start your own business#.

A large percentage of small business owners are also more confident in their personal finances:

  • Budgeting and managing everyday finances 93%
  • Following a regular savings plan 83%
  • Managing debt 92%
  • Managing investments 71%
  • Financial planning 75%
  • Superannuation 69%

If you need information about getting your business idea off the ground and becoming a successful start-up, we're here to help.


^Source: ABS Cat. No. 8165.0 and DIISTRE calculations

#1,160 Small Business Owners participated in Australia’s Money Confidence 2013 – The State of the Nation Report by ANZ and Pacific Magazines.

X

is for eXplore investment strategies.

X is for eXplore investment strategies.

It's no secret that the right investments, over time, can help you secure your financial future. But people with lower money confidence are less likely to invest.

On the flipside, people with high money confidence are more likely be ‘investment-driven’ (indeed 36% of very confident investors have shares compared to 22% of total respondents) and will prioritise saving and investing for the future. For example:

  • 27% have term deposits, compared to 15%
  • 14% have an investment property loan, compared to 9%
  • They are twice as likely to have self-managed super (13% vs 6%)

If you’re thinking about investing and want to improve your money confidence, there are steps you can take.


Y

is for you can act now - it all starts with an A-Z Review®

Y is for you can act now - it all starts with an A-Z Review®.

In order to be 'money confident', people should feel confident in their financial knowledge and experience and behave confidently in the way they execute their plans to help secure their future.

People who feel and behave confidently with money tend to:

  • Be in control of their finances and comfortable with their level of debt and with managing day-to-day expenses
  • Plan ahead and take steps to prepare for unexpected events; having adequate insurance, building towards retirement, and accumulating savings and investments
  • Stay informed by developing their financial knowledge and understanding and seeking expert information and professional advice
  • Take ownership and responsibility for their finances
  • Be financially motivated by having goals and actively working towards them

If you would like to be one of them, act now.


Z

is for get your ZZZZs back.

Z is for get your ZZZZs back.

1 in 3 Australians are losing sleep over money. Indeed the links between financial stress and poor health are clear. Consider the physical and emotional impacts listed by people suffering financial stress.

  • 39% feel anxious
  • 33% have trouble sleeping
  • 20% have mood swings
  • 17% get headaches
  • 16% eat more junk food
  • 16% gain weight

It can be a terrible cycle, but it's one you could break – build your money confidence and you could sleep soundly.