New research1 from Australian life insurer, TAL, reveals most Australians believe their financial health is a factor in their overall health (56%) and six in ten are thinking more about their financial outlook than they did 12 months ago.
Respondents recognised the link between financial, physical and mental health, with 58% saying their financial health impacts their mental wellbeing and 47% saying it impacts their physical wellbeing. 90% of Australians classified as having poor financial health2 report that their mental wellbeing is negatively impacted by financial stress.
While the research shows a decline in financial health, with the proportion of those in poor financial health doubling since 2021 (from 11% to 20%), it also reveals that being engaged with your finances can have positive impacts on mental and physical wellbeing, even for those in poor financial health.
Despite experiencing higher financial stress, those with poor financial health are the least financially engaged, with just one in five saying they are highly engaged with their finances.
TAL General Manager of Health Services, Dr Priya Chagan said that the research was a timely reminder of how financial, mental and physical health are interconnected, and reinforced the benefits of taking a holistic view of health.
“Many Australians know that when they take care of their physical and mental health, they can make better decisions, which include important decisions on personal finances.”
“This research shows that taking small steps to understand, improve and take control of financial health can have a positive impact on overall wellbeing.”
“This aligns with TAL’s Health For Life proposition which protects and supports our customers’ wellbeing at every stage of their health journey, before they make a claim, when the unexpected happens and during their recovery. We offer expert and targeted programs and services to help customers balance their physical, mental, and financial wellbeing, while also providing them with the tools to help them get more from life,” said Dr Chagan.
Many Australians rely on financial information from friends and family
The TAL research reveals that for almost four in ten Australians, friends and family are an important source of financial information (39%), followed by banks (37%) and online financial tools (37%). While less than one in five consult a financial professional like an accountant (19%), financial adviser (16%) or fund manager (7%). Worryingly, 21% don’t have any source of financial information at all.
This is most pronounced for young people, with over half of Australians aged 18-29 (56%) relying on friends and family for financial advice.Senior Financial Adviser and winner of the 2023 FAAA Inspire Women – Excellence in Advice Award, Cara Williams says being engaged with your finances and taking small steps to build financial literacy and security can help people realise their financial goals, now and in the future.
“Young people are increasingly understanding the importance of improving their financial health and literacy, particularly when so many Australians are facing cost of living pressures”.
“It is so common that clients initially reach out feeling overwhelmed when making decisions, with competing priorities and too many options available to them. Seeking out professional advice can help them clarify their goals and priorities, and then assess the options and strategies appropriate for their personal situation.”
“Even if your finances aren’t where you’d like or need them to be, taking small steps now can have a big payoff down the track – the earlier you start, the better,” Ms Williams said.
1 Research conducted by Edentify on behalf of TAL, surveying a nationally representative sample of 1000 participants, aged 18 and older, between 22-27 August 2023. A previous wave was conducted in November 2021. 2 Financial health is classified based on respondents’ answers to a series of weighted questions, on a scale from ‘poor’ (0-30) to ‘excellent’ (85+).