Financial independence is now the nation’s most common aspiration, Insignia Financial’s inaugural Financial Freedom Report has revealed.
According to the research, which was based on a survey of over 2,500 Australians, spending priorities have changed with Australians now more inclined to pursue their dream life (60 per cent), over owning their dream home (40 per cent).
The firm attributed this shift in priorities to the impacts of COVID-19 and the ensuing increase in cost-of-living pressures, which have forced three in five respondents to adjust household spending and budget more.
Insignia Financial chief executive Renato Mota said the findings have pointed away from the “traditional” dreams that might have once resonated with the majority of Australians.
“Australians are deeply aware of their financial wellbeing because it ultimately enables them to achieve the things that matter most to them, whether that be travel or spending time with loved ones. Financial independence means something different to everyone,” Mr Mota explained.
While financial independence is now said to be the number one goal, held by 55 per cent of the survey’s participants, regular holidays followed with 50 per cent, maintaining a good work/life balance with 45 per cent, home ownership with 45 per cent, and building a trusted group of family and friends with 44 per cent.
Additionally, Insignia looked into the financial literacy of those it surveyed and revealed that almost a quarter (22 per cent) of respondents were, in fact, unsatisfied with their financial situation and were eager to improve their financial literacy.
Delving further, the firm found that a third of Australians (31 per cent) received no financial literacy education in their childhood, with 35 per cent receiving a small amount and only 22 per cent receiving a fair amount.
“We know financial literacy shapes the relationship people have with money, so in order to encourage financial wellbeing, Australians need to receive practical education and guidance, especially in their youth,” Mr Mota said.
“Many Australians would have appreciated more financial education in their younger years to enable them to make more informed financial decisions and Insignia Financial are keen to contribute to reducing this education gap.”
Young women, in particular, were seen to be at a disadvantage when it came to financial knowledge and lack of adequate financial education.
Namely, Gen Y females were most likely to report receiving either none (28 per cent women versus 14 per cent men) or a small amount of financial education in their childhood (39 per cent women versus 28 per cent men).
Regarding the way Australians manage their money, Insignia found that more than half (58 per cent) of Australians want to manage their money better, with 63 per cent of the population dedicating more focus to increasing their financial knowledge compared to 12 months ago.
Commenting on this particular finding, McCrindle founder and principal, Mark McCrindle, said: “As Australians, we are known for our can-do attitude, rolling up our sleeves, and chasing our ambitions head-on.”
“According to the research, Australians are demonstrating this positive attitude in the pursuit of financial independence, whether that be through spending more time working to increase their financial knowledge or actively seeking the tools to help them do so.”
Along with the development of the report, Insignia also announced the inaugural Financial Freedom Index (FFI) which it created to measure how Australians are currently positioned to live a life of financial independence and freedom.
The FFI score currently stands at 49 out of 100, demonstrating there is more to be done to support Australians in their ability to achieve financial independence and help them reach their dreams.
