Are You Ready To Sit For A Finance Quiz?
A high number of Australian citizens are not paying enough attention to their finances and worse still; most of them are ignorant about basic aspects of finance. Michael Yardney for the Property Update throws light on an interesting survey (conducted by finder.com.au) which yields that at least 66% of Australians do not track their financial goals.
We are ignorant of basic aspects of finance
Nearly half the “plastic shoppers” do not know what interest they are being charged by the credit card companies and 20% of savings account holders are uninformed about the bonus periods.
Missing out on good deals
The survey which sought 1032 respondents clearly shows that Australians are not seeking true value out of their money. If they had been more diligent, they could have benefited from many smart deals which are scattered here and there.
“Repayment” is a case in the point
Take up the issue of repayments in a low interest rate environment. Lenders are asking for lower repayments from all the borrowers who had a variable rate agreement. Now, the borrowers have fallen in love with this situation where they are asked to pay lesser mortgage, not knowing that paying same monthly mortgage as before will hold them stronger in the long run (after all, interest rates will surely rise before the end of their loan tenure).
Yardney hits the nail right on the head when he claims that 53% Australians do not have a life insurance policy and 36% do not pay bills regularly.
You can read the original article here.
I think this carefree attitude is partly the result of the GFC which had kept us subdued for a long time. Presently, the consumer sentiment is high and we have just come past a phase where savings had become a life-saving idea akin to “holding to the last straw”.
It may be a stress release syndrome (read GFC)
The country is on a rebound and the financial nonchalance is just a reflection of this stress release. I also think that this is inherent in us. Our economy is one of the soundest in the world but our citizenry has always liked remaining untouched by an overkill of financial elements.
Having said this, they will certainly find it difficult sitting for a finance quiz. After all, not knowing one’s savings account bonus period or mortgage rate does not giving them super credentials.
Where would you rate yourself on a scale of 10 in terms of knowledge of basic financial elements?