Why young women are facing financial disaster

Young Australian women are reporting lower financial literacy levels and are at greater risk of financial hardship, according to new NAB research.

NAB's Financial hardship survey, revealed the most significant dip in financial literacy is seen in women under 30, with a third ranking their skills and ability as fair or poor.

NAB said 31% of women aged 18 to 29 were included in this cohort, and worryingly the result was "significantly higher" than any other group.

Meanwhile, men aged 50-64 (82%) and women over 65 (81%) had the highest self-reported financial literacy.

Additionally, NAB said that despite three out of four Australians (75%) considering their financial literacy to be "good" to "excellent", the percentage of individuals reporting instances of financial hardship in the past three months has increased for the sixth consecutive quarter, reaching 44%.

NAB head of customer vulnerability Michael Chambers says many people are one unexpected life event away from financial hardship.

"While NAB customers are broadly in good shape, one in four Australians say they don't have enough money for an emergency. With rising interest rates and increased cost of living, people's financial literacy and understanding of their financial situation is being tested," he says.

"Financial literacy is about more than being able to put together a budget; it extends to understanding how to manage a credit card to your advantage and being able to figure out the best way to make big purchases happen."

Chambers says the research found that individuals displaying overconfidence in their financial literacy comprehension can pose just as much of a challenge as those lacking basic knowledge.

"The most important thing to remember is there is no such thing as a silly question when it comes to finance," he says.

"Banks have an obligation to explain things in simple language, so people should feel confident about asking as many questions as they need until they feel comfortable."

Need to talk to someone?
Beyond Blue: 1300 22 4636
National Debt Helpline: 1800 007 007
Wesley Financial Counselling: 1300 827 638

This article first appeared on Financial Standard

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