Thursday, 26 May 2016
Posted by Kelly Emmerton
There’s been a lot of talk in the media of late about students getting themselves into trouble over money matters.
There was the Irish student who set up a GoFundMe campaign asking for donations to clear her debt from partying, and probably the most talked about of all, the Sydney student who spent $4.6 million of a Westpac overdraft, which was mistakenly made available to her through a ‘glitch’ in the system.
So how are Australian students faring overall for student spending? According to the ANZ Survey of Adult Financial Literacy from 2014, which was released this month, not so well. The younger demographic - students in particular - came out of it with low scores in financial knowledge and planning, but a high rank on the scale of impulsivity.
Of the five areas of financial literacy targeted by the survey - keeping track of finances, planning ahead, choosing financial products, staying informed and financial control, students scored well below the average in all but financial control.
Female students (81) scored slightly higher than males (78.7), bucking a trend that overall identified men as more financially literate.
The report also noted that the low scores seen amongst young people for ‘planning ahead’ may have been partly due to students having less exposure to long-term financial commitments like home loans or shares, rather than a conscious lack of frugal planning. It also acknowledged that retirement planning was much less important among young people.
RELATED: Student savings account guide
Students were also identified as one of the groups to rank highly in ‘impulsivity’, which the report defined as “a propensity for risk-taking in financial matters; a preference for use of credit; and an interest in impressing others with purchases.”
Other groups to score high on impulsivity included people from non-English speaking homes, blue collar workers, people with incomes of over $100,000 p.a., people more than $300,000 in debt, those with a SMSF account and men under the age of 45.
While students poor scores are not entirely out of line with general trends in the Aussie population, there’s always room for improvement. To brush up on your financial knowledge, visit our student money hub.