According to AMP’s 2022 Financial Wellness report financial stress is higher than ever, in fact it’s almost double what it was two years ago. But many are now recognising the simple things that can have a positive impact on financial peace of mind.
As the adage goes, ‘Look after the pennies and the pounds will take care of themselves’.
It’s great advice because it’s the little things you can do to save a bit here and there that really make a difference.
This is AMP’s fifth report over the past decade and we’re starting to see some trends appearing as we look back on a rollcall of prime ministers, presidents and pandemics.
The past is another country…
Back in 2014, Tony Abbott (remember him?) was in the Lodge, Barack Obama (and him?) was in the White House and almost three million of us across the country were tuning into My Kitchen Rules.
The first Financial Wellness report revealed quite a polarised country, with one in four working Australians feeling severely or moderately financially stressed while 37% of us were feeling pretty secure about our finances.
Two years on and plenty was happening on the global stage. The UK voted to leave the EU in a bombshell Brexit decision, Donald Trump won the US Presidential Election and our athletes were in Rio for the Summer Olympics, picking up 29 medals for 10th place overall.
Back home, the Liberal-National coalition won the Federal Election, returning PM Malcolm Turnbull to the Lodge.
And on the financial well-being, front things were looking up, with fewer working Australians feeling stressed and more feeling secure.
Fast forward two more years to 2018 and Malcolm Turnbull’s time as PM had come to an end, with Scott Morrison taking over. Globally the #MeToo movement was transforming culture and politics. And meanwhile there was a modest wedding ceremony over in England at Windsor Castle, with a certain Harry and Megan tying the knot.
In terms of financial well-being, the positive trend continued, with a big jump of seven percentage points in Australians feeling secure—in fact, almost half of those surveyed were pretty happy with their lot.
Then came 2020—an annus horribilis if ever there was one.
Oil prices were plummeting, inflation was starting to creep up and reports of an obscure coronavirus emerged to take centre stage.
The 2020 Financial Wellness report was conducted in the first wave of lockdowns and, perhaps as a result of widespread government assistance for individuals and businesses affected by restrictions, financial wellness peaked, with half of us feeling secure and only 14% moderately or severely stressed.
Beating the COVID blues
So, after two years dominated by COVID disruptions to our working and personal lives, how are we feeling?
Well, it’s fair to say the mood is darkening. With prices continuing to rise at the checkout and the bowser, the Reserve Bank of Australia has raised rates for the first time in a decade.
There’s been a sharp fall in the number of working Australians feeling secure, down to 36%. And there’s been a significant increase in severe stress to 7%—the highest proportion since the survey began.
More of us are feeling worried, anxious and guilty about our finances.
And in the workplace, this means we’re less energised, less vigorous and less inspired. But in line with previous reports, if you’re older—or a man—you tend to be a bit less worried and a bit more satisfied with your financial situation.
When times are tough it’s understandable to focus on your day-to-day needs. After all, you need to put food on the table and keep paying the bills.
But as probably your biggest asset after the family home, super is the cornerstone of your long-term finances. So it could pay to get on top of your retirement savings…and taking control in one area of your finances could make it easier to start getting to grips with more pressing
challenges like budgeting and saving.
Please click here to read the full report.
