Half of Generation Z don’t have a handle on their finances

FinanceEducationCommunity Fund

24 May 2021

One in two young Australians aged under 25 do not feel in control of their finances, according to a new report conducted by Findex in conjunction with the Findex Community Fund.

In a survey of 15-25 year olds, our latest report, Young Money: How is Gen Z spending and saving? found that mum and dad remain the go-to for financial advice for young Australians, with 71 per cent saying they turn to their parents or guardians for support on how to manage their money. This is perhaps unsurprising given the absence of formal financial education, with half of those surveyed (48 percent) saying they have limited to no recollection of any formal financial education at school.

Young Australians demonstrated aptitude on how to save for medium-term goals, with over half (53 percent) of respondents identifying the best tactics to save for a big purchase like a new car or long-haul holiday.

However, when asked how they manage their day-to-day finances, they were less likely to practice financially sound behaviours. One in four (25 percent) said they never or rarely set a budget and only a third (32 percent) manage their finances by calculating their monthly ingoings and outgoings. Similarly low levels of planning were seen amongst this age group when it came to planning for retirement, with only one in ten (11 percent) contributing additional money to their super.

Other gaps in young Australians financial education include:

  • 1 in 4 young Australians (23 percent) do not know how much their employer should be contributing to their super, meaning they would not recognise if their super is being miscalculated or underpaid.

  • 1 in 2 under 25s (47 percent) were unable to accurately calculate how interest works on investments.

  • Less than half (42 percent) would consider insurance if they found themselves unexpectedly unable to work.

Sound financial decision-making is strongly linked with improved financial wellbeing and greater participation in economic life. Participation in economic life affects quality of life, the opportunities that people can pursue, their sense of security, and the overall economic health of society. That’s why it’s essential we do everything we can to educate and empower our communities on how to be smart with their finances.

While there are some encouraging signs in the data that younger Australians are financially savvy, there are also some real areas for concern. While half of young Australians feel in control of their finances, this means almost one in two feels in the dark.

It’s disappointing that young people are still reporting that financial education is not featuring on the school syllabus. A heavy reliance on parents and guardians to educate the next generation on financial literacy is less than ideal and potentially harmful.

Our data shows young Australians are turning to banks, finance companies or searching online for financial advice to fill in the gaps in their knowledge. This is a responsibility we take seriously and to better support financial literacy in young people from all areas and backgrounds, we will be launching a new ten-part podcast series from the Findex Community Fund, Young Money. Launching in June, weekly episodes of Young Money will share indispensable, everyday knowledge around managing money, and common financial needs for Generation Z.

Other key findings from the survey include that contrary to a 2014 ASIC study, the gap in financial literacy levels between young people living in different parts of Australia appears to be closing. Our survey found no substantial difference in financial literacy levels between young Australians in rural or regional Australia compared to metropolitan areas.

However, the survey did find a crossover between certain socioeconomic factors correlated with lower levels of financial literacy, namely young people who:

  • Are migrants themselves or first-generation Australians.

  • Had a long-term health condition or disability while growing up.

  • Had a parent who was unemployed for 12 months or more while growing up.

  • Lived in a single parent home while growing up.

Financial literacy is important to our pursuit of a successful and fair society, and we must prioritise ways to help ensure young people from all areas and backgrounds have access to easily understandable and objective financial guidance. While our survey is not conclusive on cause and effect, it is an important reminder that a one-size-fits all approach to financial literacy is not sufficient and that we must consider extra and bespoke support to groups in society who need it most.

Find out more in Young Money: How is Gen Z spending and saving?

Findex surveyed young Australians aged between 15 and 25 to identify any common themes that potentially indicate lower levels of financial understanding amongst Gen Z. Young Money: How is Gen Z spending and saving? explores the key findings from our study, including financial behaviours, attitudes and levels of financial literacy across the group.


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Author: Matt Games

As Findex’s Chief Financial Officer and Company Secretary, Matt is responsible for the financial management of the business, the operations of the board of directors, as well as Findex’s legal and merger & acquisitions teams. Matt is also instrumental in the ongoing design and implementation of the group’s growth strategy and works closely with the executive management team to ensure the financial side of the business closely aligns to the operational and growth sides. Matt joined Findex in 2008 and brings with him experience from a number of key industry roles. He has a Bachelor of Commerce degree from Macquarie University in Sydney and is also a Chartered Accountant, as well as a qualified ‘Black Belt’ in Six Sigma. Matt’s keen interest in process optimisation allows him to build upon Findex’s robust system and process focus, ensuring the group’s financial management is well embedded into its operations and service delivery. In addition to his role as CFO, Matt is the Chair of the Board of the Findex Community fund which was established in 2018 to give back to the communities in which Findex operates. The fund’s mission is to help those isolated by location or circumstance, by providing funding and assistance with health, education and entrepreneurship initiatives. Outside of work, Matt’s hobbies include sports, especially rugby and cricket, and he and his family are also keen travellers who are always looking forward to their next adventure.