Only one in three Australians feel like they are getting ahead financially, with Generation X feeling the most financial pressure.

An independent survey of around 2,000 Australians, conducted by Enhance Research over a two-week period in January, found that only 21 per cent felt completely in control of their finances, with a further 38 per cent feeling somewhat in control. Generation X – those born between 1966 and 1982 – felt the least in control of their finances, while the Baby Boomers (born 1947 to 1965) and the Silent Generation (born before 1946) were more likely to feel in control.

The survey also showed that men tended to feel more in control of their finances (62 per cent) than women (55 per cent).

The research was commissioned by Australia’s largest credit union, Great Southern Bank, to better understand how consumers are feeling about debt as they look ahead to 2019, particularly following the traditional spending splurge that coincides with the festive season.

Great Southern Bank Head of Member Experience Todd Skerman said it was not surprising that the research also showed a clear link between how financially indebted people were and the level of financial stress they were feeling.

“We saw that the more people owed on personal loans and credit cards, the more likely they were to say they’re finding it hard to make progress on repaying their debts,” he said.

On average, those with personal debts owed just over $4,000 on credit cards and almost $28,000 on personal loans.

“We find that a lot of people reassess their financial position at the start of the new year and start to think about what they might need to change in the year ahead to improve their financial position and feel more financially fit,” Mr Skerman said.

“A significant number of Australians are making plans that are designed to get back in control of their finances this year, with reducing spending and paying down debts coming in as the most common financial resolution for 2019, followed by setting up a weekly savings plan, developing a household budget, and spending less money next Christmas.”

Mr Skerman said consumers often focused too much on the dollar amount they were repaying per week towards their debts, rather than drilling down to see how much of that amount was coming off the principal, or the outstanding balance.

“People often get caught in a vicious circle where they are paying off as much as they can each week, but they aren’t getting any closer to clearing the debt because they’re just paying interest. This often leaves people feel a sense of hopelessness, and like their financial wellbeing is going backwards,” Mr Skerman said.

Around 14 per cent said they expected it would take more than six months to repay their post-Christmas credit card debt or that they would never pay it off entirely, choosing to keep carrying forward a balance each month.

“Consolidating a number of smaller debts into a loan or credit card with a lower interest rate can be one strategy to pay down your debt more quickly. Others may need help with financial planning – it could be as simple as setting up a manageable and realistic budget you can stick to long-term.”

Mr Skerman said the other tip for consumers was to think about what purchases they pay for on cash, on credit, or using ‘buy now, pay later’ services like Afterpay.

“Think about how long you expect it will take to repay the debt and then look at what is the most suitable credit product to take out. For instance, credit cards are best suited to purchases you expect to pay off more quickly, but if you think it will take longer than three months to repay, you may want to consider a personal loan.

“While personal loans are popular for purchasing assets like a car or a boat, a personal loan might also be a good option if you are planning a wedding or an overseas holiday with the family. Nobody wants to be paying high interest on a credit card 6-12 months after the tan has faded and the souvenirs have been packed away.”

Mr Skerman said consumers looking to improve their financial situation and get debts under control in 2019 should seek advice on what would work best for their personal situation.

“Every individual’s circumstances will be different, so it’s important to chat to someone about your situation, your goals and the best options to get you there,” he said.

For more information about Great Southern Bank’s financial products and services, visit the support section of this site.

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