COVID-19 has made Australians more aware of their finances

Discussing money matters is never easy, but new research from ME Bank has found that Australians are having more conversations about their money than they were before the coronavirus pandemic. 

The survey of 1,000 Australians found that one in two of those surveyed are discussing their finances more than they were pre-COVID, while 71% attributed their increased financial conversations to the economic impact of the pandemic. 

More than a quarter (26%) said they’ve felt they need to improve their financial knowledge, suggesting the COVID crisis has motivated Aussies to take more of an interest in their finances.

The research also found that it's the younger generations who are leading the charge with money conversations. About 70% of Gen Z and 71% of Gen Y are discussing financial issues - nearly 20% more than the national average.

Need somewhere to store cash and earn interest? The table below features introductory savings accounts with some of the highest interest rates on the market.

Advertisement

Online Savings - Premium Saver

Product Features

• Increase your balance by $200 each month to earn the maximum interest
• No account keeping fees
• No minimum balance
• Interest paid monthly

Total interest earned$541

1.45 % Base interest rate

Bonus rate of

3.90%

Conditions apply.

5.35 % Max interest rate

Intro rate for

then

5.35%

More details

The money topics being discussed the most were savings (68%), household spending (53%), bills (51%), JobKeeper and JobSeeker (28%).

Buying or selling property was the least discussed topic, followed by debt.

ME General Manager Personal Banking, Claudio Mazzarella said one silver lining to come out of the coronavirus crisis is that it's made Australians more aware of their finances. 

“While the economic impact of COVID-19 has been a huge challenge for many Australian households, it has heightened our need to better understand our money, particularly among young Australians, who have not faced a crisis of this nature in their lifetime," Mr Mazzarella said.

ME’s survey also revealed that Australians prefer to talk about money with those they're closest to rather than with a professional.

Partners or significant others topped the list (62%) followed by family members such as parents or siblings (48%) and friends (35%). Less than 10% said they would speak to their bank or a financial expert about money matters.

“We’re of course more likely to have these types of personal conversations with those we know and trust, but it’s smart to also consider speaking with a financial expert where possible,” Mr Mazzarella said.

More than half (52%) of Australians surveyed said they have taken action to improve their financial situation during COVID-19 by cutting back on their spending, while a third (33%) said they have set up a budget.

“The numbers show that many will come out of this pandemic with stronger personal finance skills, enabling them to make good decisions with their money and hopefully bounce back when things pick up. Despite the setbacks, some may even be in a better position than they were pre-COVID-19,” Mr Mazzarella said.

Queenslanders living without any savings

But despite this, new research from RACQ Bank has revealed that nearly 30% of Queenslanders don't have any savings or a financial safety net. 

RACQ Bank spokesperson Lucinda Ross said the findings were shocking, but not surprising given the economic impact from COVID.

“We’ve heard some heartbreaking stories from our members about redundancies, being stood down or having to tighten their budget this year,” Ms Ross said.

“These issues can have massive long-term ramifications for households, and while hardship programs to defer repayments can help, it’s really important to make sure you have a safety net you can fall back on.

“For those who have built a safety net, nearly 40% report it won’t be enough to get them out of a tricky situation.”

Ms Ross said those who can afford to should start putting away some money into their savings to support them.

“If you have a few extra dollars left over at the end of the fortnight, put it away into a savings account so you can start building security for your family," Ms Ross said. 

“While it’s recommended to have three months of living expenses put away, don’t get thrown off by the big number, just get started and build what you can.

"It’s worth having a look around your home too to see if there are any extra items you could sell, and check your superannuation insurances to understand what you’re covered for in the case of redundancy or financial hardship."