28% of working Australians are “financially unfit”
Almost one in three Australians are "financially unfit", according to a new study commissioned by fintech startup Map My Plan and Newgate Research.
Launching their report yesterday, Map My Plan's ‘The Financial Fitness of Working Australians' study examined the situation of working Australians, aged 18 years and over, to determine two types of data: a Financial Fitness Index and a productivity loss estimate, based on the amount of time workers spend thinking about finances during work hours.
The Financial Fitness Index took into account an individual's financial control, capacity to absorb a financial shock, planning and freedom.
According to Map My Plan chief executive and founder, Paul Feeney, the study was conceived to determine where ordinary working Australians need the most financial help and provide them with the tools and advice they need to get support.
"Financial planning, at its core, is broken. Financial literacy is great, but until it's actually got context, it's worth a lot less," Feeney said.
"The whole premise of Map My Plan is giving people the information they need to make well informed financial decisions throughout life. We need to deliver people the information they need as they need it."
According to the findings, 58 per cent of working Australians have less than three months of emergency savings and one in 10 is "super fit", which is classified as following a well-defined financial plan, having sufficient insurance and not carrying expensive lifestyle debt, as well has having six months or more of emergency savings.
Feeney said that financial planning is not about effectively managing portfolios and investments, it is about financial control, with the behavioural attitudes of individuals being a key determining factor behind financial security and the willingness to embrace new forms of technology and advice.
"I think the big tsunami of the workforce is Gen X, these are the [groups of individuals] who aren't fit because they're struggling with the mortgages," Feeney said.
"Gen Y are saying, ‘I want to be empowered to make my own decisions'. These are the ones who are most disenfranchised currently with the industry and traditional ways of where we are getting our advice from."
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