Nearly two thirds of Gen Y have been kept awake at night by financial concerns, a new survey from REST Industry Super has found.
The online poll of 1,000 people aged 18-30 showed that while the popularly-dubbed “Me” generation knows saving is a priority, respondents were worried about money and may not be properly educated about managing finances, both in the short term and for longer term areas like saving for a property deposit or planning for retirement.
Saving money is important to 87 per cent of Gen Y, and 66 per cent put money from their regular paycheck into savings always or most of the time. Despite being good accumulators, 61 per cent say they were never taught how to save.
Of those currently receiving financial advice, 72 per cent said they found it useful.
REST CEO Damian Hill said it was encouraging that Generation Y had developed a strong culture of saving, but concerning that such a large proportion were anxious about money.
“What we found was an alarming number of young Australians spending sleepless nights worrying about their financial position. Considering such a high percentage of the young people we surveyed have never received any financial advice, it’s not surprising that they have ongoing financial worries.
“Learning how to manage your money while you’re young is critical in securing a strong future. We don’t want to see this generation overwhelmed by financial stress throughout the rest of their working lives, and through to retirement.”
While many are good savers, one in five Gen Ys had no “buffer” money put away in the case of an emergency.
“It is important young people have some extra money to call on in unexpected times of crisis,” Mr Hill said. “Those who don’t often have to ask their families for help or go into debt, outcomes that should be avoided if possible,” he said.
Mr Hill was also concerned by a clear trend of skepticism toward financial advice, with one in two saying they would not talk to a financial advisor, which may have implications for their long- term approach to getting what could be extremely useful assistance in planning their financial futures.
“With over half the generation refusing to talk to a financial expert, and one in 10 completely distrusting them, we have to reassess the role of family, government and financial institutions, including superannuation funds, in educating young people about money and helping them make the most of their short-term and long-term financial goals,” Mr Hill said.
Over 70 per cent of Gen Ys do not go to their family for budgeting, savings or investment advice.
The results also showed that Generation Y have similar financial concerns to everyone else, and cited household bills, health costs and paying off debt as some of the things that keep them awake at night. [sam id=31 codes=’true’]
Other key findings of the survey included:
- 35 per cent of Gen Ys won’t discuss what they earn with friends or family
- Nearly two thirds of Gen Y haven’t been taught about money from their parents
- Those working full time more likely to save for a big event like a holiday or wedding than a house deposit
- One in four said lending cash to their buddies affects their savings plans
- Gen Y males are twice as likely to distrust financial advisers
- They may appear to be the smart phone generation, but only 39 per cent of Gen Ys are using financial or money apps
“We know Gen Ys are good savers, the next step is to teach them to be smarter with their money. Many superfunds, including REST, provide their members with access to financial advice and education, and in the future we can expect superfunds to play a bigger role in delivering financial education,” Mr Hill said.
REST Industry Super’s top tips to help your super grow
- Check your employer is making contributions – Check your pay slip and super account to make sure your employer is making contributions to your super equivalent to 9% of your earnings. The Superannuation Guarantee (SG) rate will gradually increase from 9% to 12% between 1 July 2013 and 1 July 2019
- Consider making additional contributions – You can make extra super contributions from your after-tax or pre-tax income There is a cap on the amount of these sorts of contributions you can make. From 1 July 2012 to 30 June 2014, the concessional contribution cap is $25,000 no matter how old you are.
- Make sure your super fund has your tax file number – If not, your employer contributions may be taxed at a higher rate
- Find any lost super – Search on ato.gov.au to find any forgotten super from other funds
- Consider consolidating super accounts – If you have various accounts, you may lose money to multiple fees and find it harder to keep track of your super
It’s well known that we don’t receive a good financial education at school. We’re just not taught about the concerns brought up in this survey.
It’s up to each of us to educate ourselves on money matters and become financially fluent.
The problem is that with so many mixed messages out there about what to do with your money it’s hard to know who to listen to.
It’s hard to know who to trust.
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