When asked what tools they use to do the household budget, 30 per cent of respondents to a recent survey said they didn’t do a budget at all. For many Australians the financial literacy message is not getting through.
Canstar’s latest Consumer Pulse Report also reveals that for close to half of us pen and paper is as sophisticated as it gets when we do the household budget. Forty-three per cent said that is how they do it.
Something else that may not be getting through is the message from banks and wealth managers that they have sophisticated financial management tools that help consumers handle their spending and saving.
Twenty-five per cent says they use a spreadsheet, 6 per cent use an app, 4 per cent use accounting software and 4 per cent use the bucket system.
Perhaps as a result of the unsophisticated way we manage our budgets, there is a big savings gap in many households. According to the Canstar report, 24 per cent of people don’t have any savings. Canstar reported the same proportion of non-savers last year.
Of those who are not saving, 74 per cent say they live from one pay day to the next.
Twenty-six per cent feel they are not living within their means, spending more than they earn. Thirty-nine per cent have debt other than a home loan and, of those people with other debt, 67 per cent say it is on a credit card.
Forty-two per cent say this debt is a worry for them, with a significant proportion of them saying they worry about it daily.
Among those who do save, the savings account is the popular choice. Despite current low interest rates, people use a savings account ahead of a mortgage offset or investment account.