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| Media release 30-12-2007 |
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| Newsroom |
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| 'FINANCIAL FITNESS' SHOULD TOP LIST FOR AUSSIE'S NEW YEAR'S RESOLUTIONS |
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| Citi Fin-Q Survey shows Australians need to set personal finance goals for 2008 |
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| 48 percent of Australians have no insurance |
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| 29 percent of Australians are worried about their financial future |
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| 50 percent of Australians save money only when they can and a further 22 percent rarely set aside or save money when they get paid |
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| December 30, Sydney: Citibank research shows Aussies aren't putting enough focus on their financial well-being and is urging them to add 'financial fitness' to the top of their New Year's resolutions list for 2008. |
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| The Citi Fin-Q survey has found that many Australians are not saving, budgeting or seeking financial planning advice. |
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| With these statistics in mind, Citibank has outlined important
strategies for addressing 'wallet weaknesses' as a good foundation for New Year's resolutions. |
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| 1. Take control now |
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| The Citi Fin-Q survey shows that 29 percent of Australians are worried about their financial future. |
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| According to Cameron McLeod, Head of Sales and Distribution, Wealth Management, recognising and identifying financial issues should be the first step taken to gaining control. |
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| "Figure out where your 'financial weaknesses' are - whether it's an inability to control your debts, failure to stick to a savings plan, or failure to make your money work harder for you. I'd urge Aussies not to bury their heads in the sand - but to make 2008 the year to get ahead" |
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| 2. Start a savings plan |
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| Regular savers are in the minority with the Citi Fin-Q survey showing that 50 percent of Australians save money only when they can, 22 percent rarely save anything and only 28 percent are disciplined enough to set aside money every time they get paid. |
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| Research also showed that 19 percent of Australians would only last one week on their current savings if they lost their job and had all the usual expenses to pay, 45 percent would last up to four weeks and only 23 percent could last more than three months. |
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| Men are slightly better at saving, believing they could last an average of 7.6 weeks compared with women, who believed they could only last 6.6 weeks. |
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| Older people appear to be more capable of surviving without an income. The average length of time for over 40s was 9.1 weeks with 35 percent of this age group saying they could last more than three months. Those aged 18-29 would last 5.5 weeks on average, with the middle age group (30-39 year olds) lasting 6.2 weeks on average. One in four (25 percent) 30-39 year olds would last less than one week on their current savings if they lost their job. |
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| "Aussies should aim to have at the very least, a large enough nest egg in reserve to deal with life's uncertainties. No matter how much you are earning, it is critical to 'pay yourself first,' which means putting a little bit aside out of each pay to ensure there is some money available for emergencies," Mr McLeod said. |
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| 3. Start a budget |
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| Overall only 19 percent of Australians make a monthly budget and stick to it. |
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| "You can't control your cash-flow if you don't monitor where your cash is going. A budget is the best way to minimise expenditure on items you don't need - which can be put towards paying down debt or saving for a rainy day," Mr McLeod said. |
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| "There are also a number of websites and tools available to assist people in setting a budget, including http://www.citigroup.com.au/usecreditwisely/index.html." |
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| 4. Improve your financial IQ |
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| Only 9 percent of Australians rate their level of financial understanding as very good. Furthermore, 22 percent have admitted they would have no idea what to do if they were given the equivalent of six month's salary to invest. |
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| Mr McLeod said, "Buy some books, attend investment seminars, visit websites, and read magazines and newspaper articles. Equip yourself with as much information as possible to make the best possible choices about your own personal finances. There is a wealth of information available, so take control and educate yourself about your options. |
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| "By being proactive and taking the time to learn about investment options, you are far better placed to choose the right one for your own situation; and also work with a planner to set a course that is right for you. You'll also have a better understanding of things like the share-market, property investing, and feel more confident about your future." |
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| 5. Get insurance |
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| Alarmingly, the Citi Fin-Q survey has found that 48 percent of Australians have no insurance whatsoever, with 18 percent admitting to having life insurance but holding no other form of insurance including health or critical illness insurance. |
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| Those aged 18-29 are the least likely to have any insurance, with 58 percent admitting to not holding any insurance policies. Those aged 30 or older are not much better with 52 percent of those aged 30-39 having no insurance and 38 percent of those aged 40 or older, also failing to hold insurance of any type. |
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| "Quite frankly, the laissez-faire attitude to insurance in this country is downright alarming. Holding health insurance and income protection insurance, at the very least, should be a top priority for all Australians," Mr McLeod said |
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| "Life is unpredictable. You never know what could happen to your job, home or possessions and the only way to protect yourself is to get an adequate level of insurance. Income protection insurance should probably be at the top of the list - if for some reason you lose your job, income protection insurance at least allows you to fulfil your obligations." |
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| 6. Plan for your future |
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| The Citi Fin-Q Survey shows that Australians are not adequately preparing for their retirement with 83 percent admitting they did not have a formal retirement plan that had been prepared by a finance professional. |
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| The research also found that one in two Australians (51 percent) either have no idea how much they need to fund a comfortable retirement or have not started planning for their retirement. |
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| This leaves a mere 13 percent who are prepared, know how much they need to fund a comfortable retirement and feel they are on track to reach their goal. Another 36 percent of people aren't entirely sure how much it will take to fund a comfortable retirement, but have at least got the ball rolling with some savings and investments. |
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| "It is never to early to start preparing for retirement. Younger people should start by learning as much as they can about superannuation and how their fund is structured. Choosing the right fund can make a significant difference," Mr McLeod said. |
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| "Seeing a financial advisor is also critical. Getting in early, developing effective habits, then taking ongoing steps for retirement is the best way to have a smooth transition from working life to retirement and ensuring you can maintain your current lifestyle. |
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| Media enquiries and copies of the report: |
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| Kristen Kaus: T: (02) 8225 1631 M: 0401 862 986 kristen.kaus@citi.com |
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| Notes to editors: |
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| About the Citi Fin-Q Survey |
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| Most of us know that IQ stands for Intelligence Quotient. The Citi Fin-Q Survey was designed to measure the Financial Quotient (Fin-Q Score) or financial well-being of consumers. As part of this survey, Citi scored respondents on 11 different questions closely related to financial well-being with a maximum possible score of 100. The research also incorporated separate attitudinal and lifestyle questions. |
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| The research was conducted by CXC Research amongst a representative sample of 400 Australian adults, 18 years of age or older between 8-12 October 2007. Research was also conducted in China, Hong Kong, India, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand with the same sample size of 400 in each of these countries. |
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| Any advice is general advice only. It was prepared without taking into account your objectives, financial situation, or needs. Before acting on this advice you should consider if it's appropriate for your particular circumstances. Before you decide to acquire a product, you should obtain the relevant Product Disclosure Statement, and consider its suitability for your objectives, financial situation, or needs. |
