A third of Aussies fail this important test
AUSTRALIA has just flunked an important national test - and we should all be worried by our dismal results.
That's because the average Aussie scored a mediocre 51 out of 100 in the newly released Financial Consciousness Index (FCI), with a third of us failing to even reach half marks.
Why does it matter?
Because it means millions of adults are struggling with basic financial literacy, such as how to write and manage a budget and pay the bills.
And with an undeniable link between a low FCI score and poor financial wellbeing overall, the results indicate nearly six million Australians - just under a quarter of the entire population - are facing job insecurity, a lack of savings and battling the rising cost of living.
The study, which was carried out by Deloitte Access Economics for comparethemarket.com.au and which was the first consumer study of its kind in the country, polled thousands of Australians to discover the average national score.
It measured people's confidence in their ability to influence their financial outcomes, as well as their willingness and ability to improve their financial situation.
Results tended to be influenced by a range of factors, including age, income, gender, location, education and home ownership.
The study also found around a third of the population were "financially vulnerable", with 38 per cent concerned by job security, and 29 per cent claiming to be less confident in their ability to retire comfortably at 65 compared to last year.
With a score of 54 out of 100, South Australian woman Kylie Thompson is ahead of the nation when it comes to financial literacy - something she attributes to her upbringing.
But even with her above-average financial savviness, Miss Thompson, who is unemployed and relies on Newstart payments, says she struggles to make ends meet.
After paying her monthly bills, Miss Thompson is left with just $80 a fortnight for other expenses. But she says millions of Australians with less financial know-how are doing it even tougher.
And in her opinion, something has to change - fast.
"I find that I'm pretty financially savvy, I have a budget and I stick to it every fortnight, because on Centrelink payments, you just have to," she told news.com.au.
"But there does need to be more education. At school you're not taught about budgeting, but it should be a compulsory subject, especially in Year 11 and 12.
"When you're at school you're in a bubble where mum and dad pay for everything but once you finish school and turn 18, you're out in the real world - but there's not enough preparation."
The 30-year-old said the Government needed to update the national curriculum to help young people learn essential financial life skills such as budgeting, filing tax returns, paying bills and even applying for jobs.
She said there also needed to be more public awareness regarding available services, such as dental assistance, for those on Centrelink payments.
Miss Thompson, who often volunteers with the Salvation Army, said she regularly met Australians with "no idea" how to budget, and she said the government needed to step in.
"I see people who have stretched their dollar so far they literally have no money left, so they have to come in and get assistance. They struggle week in, week out," she said.
Just over a quarter of Australians met the basic threshold of financial consciousness, giving them an FCI score between 45-55. Just one in 10 scored over 70.
Comparethemarket.com.au general manager of banking Rod Attrill said the results revealed a national crisis.
"If people do not feel empowered or able to improve their financial situation, then this has obvious effects on the economic health of the nation as a whole," he said.
"We feel it demonstrates that the majority of Australians need greater education, empowerment and understanding to enable them to take tighter control of their everyday finances."
While a person's FCI score tended to rise with their income, the same could not be said for education, with those with postgraduate degrees only scoring an average 57 out of 100.
To complete the test and find your own FCI, click here.