Research from life insurer TAL, conducted by Edentify and surveying a nationally representative sample of 1,000 participants aged 18 and older, has found that 56 per cent of Australians believe their financial health is a factor in their overall health, while six in 10 are more focused on their financial outlook than they were a year ago.
Respondents skewed further towards impact on mental health, with 58 per cent saying there was a link between their financial health and mental wellbeing, compared with 47 per cent believing it impacts their physical wellbeing.
Among the respondents that were classified as having poor financial health, 90 per cent also reported that their mental wellbeing is negatively impacted by financial stress.
TAL said that the research also showed that the proportion of respondents in poor financial health had almost doubled since 2021, increasing from 11 per cent to 20 per cent.
Dr Priya Chagan, TAL general manager of health services, stressed the importance of taking a holistic view of health.
“Many Australians know that when they take care of their physical and mental health, they can make better decisions, which include important decisions on personal finances,” Dr Chagan said.
“This research shows that taking small steps to understand, improve and take control of financial health can have a positive impact on overall wellbeing.”
While the report also revealed that being engaged with your finances can have positive impacts on mental and physical wellbeing, even for those in poor financial health, just one in five in that category said they are highly engaged with their finances.
Additionally, only 16 per cent said that a financial adviser is an important source of financial information, falling well behind friends and family (39 per cent), banks (37 per cent), and online financial tools (37 per cent).
Accountants also ranked marginally higher at 19 per cent, while just 7 per cent identified fund managers. A fifth of respondents (21 per cent) don’t have any source of financial information at all.
This is most pronounced for young people, with 56 per cent of Australians aged 18–29 relying on friends and family for financial advice.
Cara Williams, a senior financial adviser, said that being engaged with your finances and taking small steps to build financial literacy and security can help people realise their financial goals.
“Young people are increasingly understanding the importance of improving their financial health and literacy, particularly when so many Australians are facing cost-of-living pressures,” Ms Williams said.
“It is so common that clients initially reach out feeling overwhelmed when making decisions, with competing priorities and too many options available to them. Seeking out professional advice can help them clarify their goals and priorities, and then assess the options and strategies appropriate for their personal situation.
“Even if your finances aren’t where you’d like or need them to be, taking small steps now can have a big payoff down the track – the earlier you start, the better.”
