Financial stress is a daily struggle for many Australians, and a new study has revealed as many as one in three are embarrassed by their financial situation.
The Mortgage Choice study looked at Australians’ attitudes and behaviours towards their finances. Of those surveyed, 34 per cent said they felt embarrassed by their finances, while 42 per cent of respondents felt embarrassed by their personal debt. The study also found one third hide the fact that they’re in debt.
Mortgage Choice CEO Susan Mitchell said: “Our research has found that when it comes to their finances, many Australians say they are embarrassed, which may stem in part from their personal debt and overall money habits.”
The research also gave some insight into how Australians are using their credit cards, with one fifth of respondents admitting they pay only the minimum amount on their credit card each month and 11 per cent said they have not paid off their credit card in full for the last three months.
Mitchell said the fact that people are not paying off the balance on their credit card each month “is worrying”.
“What is also particularly concerning is the number of Australians who pay only the minimum amount of their balance each month,” she said.
“This prolongs the amount of time they are in debt, as a considerable proportion of the payment is servicing the interest, rather than the balance and is one way consumers feel trapped in a seemingly endless cycle of debt.”
She said the research also found that more than a quarter (27 per cent) of Australians spend more than they earn, “which may explain why they are racking up personal debt”.
“These habits may be contributing to the shame and embarrassment some Australians say they feel about their finances.”
In fact, the study revealed almost a fifth (19 per cent) of Aussies say they are living secret financial lives.
“This begs the question, are the feelings of embarrassment keeping Australians from taking an active role in managing their money? The research suggests this might be the case, as one-fifth of Australians said they often do not regularly monitor their finances.”
She added: “The problem with avoiding the topic of money altogether is that often, a small problem can snowball into something more serious if it is not dealt with early on.”
Important information: The information provided on this website is of a general nature and for information purposes only. It does not take into account your objectives, financial situation or needs. It is not financial product advice and must not be relied upon as such. Before making any financial decision you should determine whether the information is appropriate in terms of your particular circumstances and seek advice from an independent licensed financial services professional.