One in Five Consumers Unable to Manage Small Financial Emergency

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One in three Australians admit to living pay cheque to pay cheque, while one in five say they would be unable to cope with an emergency expense of less than $1,000, according to new research from BT.

Deanne Stewart
Deanne Stewart

A survey into the financial health of nearly 5,000 Australians found that 30% of respondents said they rarely had money left over after each pay cheque. In addition, less than half said they were able to meet their monthly expenses.

The survey also found that many Australians are worried about their ability to cope with unexpected expenses, with 39% admitting they would not have enough savings to maintain their present lifestyle if they lost their income for up to six months. 17% of respondents said they would be unable to handle even a small financial emergency, costing between $500 and $1,000.

BT General Manager, Deanne Stewart, said the results showed that there were a large number of people struggling to cope financially day-to-day, and that these problems were not necessarily linked to the size of their pay packet.

“In many instances people are living in the hope that they will achieve their goals rather than planning for a fulfilling and secure future. This has implications for their health and lifestyle, impacting on their levels of stress, and in the longer term influencing their enjoyment in the years after they finish work,” Ms Stewart said.

“Surprisingly 57% have no regular savings plan and this figure peaks amongst 45 to 54 year olds when they might expect to be at the height of their earning capacity,” she added.

Other findings from the BT Australian Financial Health Index included:

  • 32% of people worry about being able to meet normal monthly living expenses
  • 56% say they cannot save as much as they would like to, and a similar number (57%) said they had no regular savings plan
  • One quarter of respondents said they were concerned about the total amount they have to pay off debts each month
  • 21% would have trouble borrowing $2,000 cash if they needed it

BT said it conducted the survey in November 2012 to gain a deeper insight into how Australians see their financial health and to better tailor its products and services to meet their financial needs. According to the group, the results reinforce the view that many people are looking for help and guidance to achieve long-term financial goals.



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