People happiest with their lot in life are most likely to have a financial plan, according to new research released by the Financial Planning Association of Australia (FPA) into working-age Australians truly -living the dream', and how they do it.
The national research includes fascinating new insights into the regrets, dreams, and attitudes to matters of money and life across generations, genders and geographies. Almost one in four Australians (23%) surveyed believe they are -definitely' or -mostly' living the dream (infographic available on request). These enviably content people are nearly three times more likely to seek the advice of a financial planner (24%) than those who describe themselves as not yet living the dream (9%).
Not everyone is content, however. The research also shows 80 per cent of working-age Australians are stressed about money and finances, with 1 in 4 indicating acute stress levels. Gen X and Gen Y are the most stressed about money and finance, and are the generation most likely to struggle with planning. Half of Gen Y (53%) finds planning their life very/somewhat hard. Two in five Gen X Australians feel the same way (44%), while Baby Boomers are the most likely to find planning easy to do (25%).
Owning a home is no longer a dominant Australian dream – slipping to a distant fourth place in the dream stakes, according to the FPA 'Live the Dream" research. Most of the measures Australians attribute to 'living the dream" in 2017 are linked to personal finance. While 57% believe living the dream means having the lifestyle of their choice, a similar proportion (54%) believe it means having financial freedom and independence.
'The research reveals a powerful data link between our nation's happiness, and financial planning. It's my hope we'll inspire more people with this research and the various stories and insights we're releasing this Financial Planning Week to seek sound financial advice to unlock their own dreams," said FPA CEO, Dante De Gori, CFP®.
Australia's Four Financial Action Personalities:
Four distinct personality types are identified in the national data based on people's ability to dream and to act on their plans. The results are summarised below:
Daydreamer (32%) – Daydreamers love to dream about their future but often struggle to act on their plans. Almost half are Generation Y (47%) making this one of the younger segments. Daydreamers are more likely to be female (55%).
Go-Getter (33%) 1– Go-Getters are not only big dreamers but are the type who are prepared to act on their plans. Like Daydreamers, Go-Getters are likely Generation Y (48%). They most likely live in a capital city (68%) rather than a regional area, and are more likely to have a degree (41%), and work full-time (46%) than other segments.
Cruiser (19%) – Cruisers are those who sail through life without much dreaming and prefer to spend more time enjoying life than acting with the future in mind. Baby Boomers dominate this profile (37%). Cruisers are more likely to be relationally free (24% are single) than any other segment.
Builder (16%) – Builder personalities prefer to act immediately, and rarely spend time dreaming about the future. They are more likely to be Gen X (38%) and be in a family household without children (37%) than any other segment.
Question: How did you change your life to ensure you were living the dream?
Kylie Travers: I was a homeless single mother because of domestic violence, something had to change. I set a large goal and got professional advice to help me achieve it including a financial planner, lawyer, accountant and life coach. I knew it wasn't something I could do on my own, but it was up to me to change my life to ensure my daughters and I had the life I wanted for us.
Question: What advice do you have for other women who want to be able to live their dream?
Kylie Travers: Take action. Work out what you want your life to look like then create a plan to make it happen. A dream won't be more than a dream if you don't do anything to make it work. It might take a few years, but with proper financial advice and determination, anything is possible.
Question: What surprised you about the recent research and report from Money and Life?
Kylie Travers: The drop in the desire to own a home. I have seen this happen more in my circles and seen plenty of articles surrounding it. I love property, but it seems the "Great Australian Dream" may not be owning a home anymore.
I did love the four personality types the research uncovered"Daydreamers, GoGetters, Cruisers and Builders"based on your natural propensity to dream about your future, plan and act. Being aware of what you want and taking action to make it happen, is what will ensure you get to live your dream life.
You can read the 'Live the Dream" report and take your 'Money Destiny" quiz here.
Question: Why do you believe women are more stressed out about finance than men?
Kylie Travers: Considering there is still a gender pay gap, we have to take more time off work if we choose to have a family, it is harder to get back into the workforce once we have kids and when divorce happens it is usually the mother who has the kids and needs to provide for them, it's no wonder women are more stressed about finances than men. All those things impact our earning capacity, superannuation and overall wealth. We stand to lose a lot and have more obstacles financially than most men. Add to all that the fact we retire earlier than men and live longer, it's really important that we do truly understand our financial position.
Also, the statistics for women, particularly older women, in terms of homelessness are truly horrifying. I've been homeless, been through divorce and rebuilt my life after an abusive marriage. It is expensive, long and hard. The impact emotionally, mentally, physically and financially is profound. I left in 2012 and am still paying for it. I love where my life is at now. I could have been in a better position financially though.
Life today isn't how it was for my parents. I was raised where the mum stays at home and dad works. That isn't practical anymore. Both parents need to work, but the cost of childcare and time out of work falls on the woman still in most families. I think, the attitude in our society, especially options for workplace flexibility, sometimes doesn't match reality, and the needs of Australians anymore. And it's women who are left vulnerable and exposed.
Question: How do you ensure you're not stressed about your financial situation?
Kylie Travers: I have a set and forget approach. I have my plan, I have a budget I stick to and I have professionals I go to for advice. With a solid plan, I know I am on track and don't need to stress. I check my finances daily, but don't worry about them. I revise my budget as needed and since everything falls back on me, I am proactive about increasing my income and assets.
It wasn't always this way. As a homeless single mother, I was stressed out of my mind about finances wondering how I could get us back on track. Once I set my goal I tried to focus on it and do what I could instead of worrying. I have spent a lot of money over the years on legal fees, therapy for my kids and I, extra assistance for their learning disabilities and at the time I sometimes wondered how I would have enough money. By being smart, having a plan and looking for ways to make extra money, I managed to do everything and invest.
My advice: Be smart. Have a plan and stick to it. You don't have to plan out your whole life. And if you find setting goals and planning hard, get advice from a professional. A financial planner can help you set goals and put a plan in place to achieve them over time.
Question: What are your financial goals for the next twelve months?
Kylie Travers: I am going for full custody of my daughters, so I set the goal to earn that amount on top of everything else. I had already set an increased income goal, so I set a goal to cover this in full without detracting from my current plan.
I also have multiple overseas trips planned and would like to purchase a new property.
Question: Can you share your top saving tips?
Kylie Travers: Have a clear goal you are working towards such as clearing your debt, saving for a house, or a holiday.
Create a budget and stick to it.
Whenever you are tempted to spend or find something you want to buy put it on a 30-day list. At the end of the 30 days if you still want it, work out how to incorporate it into your budget. Most of the time, by the end of the 30 days you don't want it anymore.
Go over all your expenses, compare the services to make sure you are getting the best deal and reduce anything you can.
Round down. Whenever you check your bank account or spend money, transfer the excess to savings. For example, if you have $114.55 in your account, round it down and transfer the $4.55 to savings. These small amounts add up quickly.
Check out the 21 Day Money Challenge http://thethriftyissue.com.au/21-day-money-challenge/ for things you can do every day for 21 days to improve your finances.
On day 1 we had one woman find $20,000 in lost superannuation, others found thousands through these tips and many people increased their income or savings by over $500 a month.
Question: Where can we learn more about financial planning?
Kylie Travers: A good place to learn about financial planning or find a planner is the Money and Life website.
Question: Can you tell us about your business?
Kylie Travers: I am an international keynote speaker, author, multiple award-winning blogger, marketing consultant and brand ambassador. My business includes my blogs which share ways for women to make and save money with a focus on my goal to help 1,000,000 Australians survive, thrive and where possible, get off Centrelink, as well as private consulting, speaking and writing. You can find me at www.kylietravers.com.au and www.thethriftyissue.com.au
Interview by Brooke Hunter