(1888PressRelease)
December 16, 2008 - Sydney: Australia has come bottom of the ladder with a below average score of 44.1% in an 11 nation survey that measured the personal financial IQ of 4,400 respondents across the Asia Pacific region.
Aimed at gathering a broad, top line picture of how people in the Asia Pacific region manage their personal finances, Citi’s Fin-Q 11 Nation Report has revealed that the top spot went to India with an average Fin-Q score of 70.3%. The average score across the 11 nations was 52.8%.
Rank & country Fin-Q score Rank & country Fin-Q score
1. India 70.3% 7. Malaysia 49.0%
2. China 63.1% 8. Philippines 47.8%
3. Hong Kong 53.5% 9. Thailand 47.5%
4. Taiwan 53.3% 10. Korea 47.3%
5. Singapore 52.9% 11. Australia 44.1%
6. Indonesia 52.2% 11 Nation average 52.8%
Citi’s report covers a lot of ground. Respondents to the internet based survey were scored on 11 different questions closely related to financial well-being with a maximum possible score of 100. The survey also included 11 separate attitudinal and lifestyle questions*. The full report is available to view at www.citibank.com.au.
Tania Browne Investment Consultant & Advice Coach at Citibank said: “Australians don’t like to come last at anything so this should be a wake up call to every one of us to start taking the management of our finances more seriously. Education definitely plays a key role in this, and our research gives further weight to the ongoing argument around the need for more financial education in the community.”
Knowledge of money matters
Across the 11 nations, on average 39% of respondents rated their overall understanding of money management as ‘very good’ or ‘good’. In this area Australia had an above average result of 49%, but by contrast India romped home with 65% of people saying they had a ‘very good’ or ‘good’ level of money management knowledge.
Managing the balance sheet
The research showed 54% of Australian respondents own their home, either outright or with a mortgage. The result for China was 81% but this high result has been achieved with the support of state-based incentives.
India came in at 69% followed by Malaysia and Singapore with 61%.
Looking at mortgage participation, Malaysia and Singapore reported the highest rates at 45% followed by Australia (38%) and China (36%).
Not only does China have the highest level of home ownership, they also have a strong self-belief in their level of investing with 99% saying they would “know exactly” or have a “good idea what to do” if they had six months salary to invest. In Australia the result was significantly lower and more than one in five (22%) confessed to having no idea what to do if they had six months salary to invest.
Looking at more basic aspects of personal finance like budgeting and saving, 19% of Australians always stick to a budget and 28% save money from every pay. These figures seem low compared to China (62% and 62% respectively), India (56% and 62% respectively) and Hong Kong (50% and 40% respectively).
Taking this a step further, in the event of job loss and having to maintain all the usual expenses like a mortgage and bills, Australians’ rainy day savings would only last seven weeks compared to China (14 weeks), Taiwan (12 weeks) and Korea and Singapore (11 weeks.)
Tania Browne said Australians’ optimism may be a bit misplaced. “A positive attitude is fantastic – and Aussies are well known for that – but a little bit of realism may be required. The average Australian would only last seven weeks on their savings if they lost their job and given the way the economy has changed over the last 12 months, this is a concern. It depends on the circumstances of the individual or family but ideally we should have a savings buffer of three to six months to get us through those unforeseen times,” she said.
Satisfaction, optimism…and attitudes
Across the 11 nations, on average 70% of people were satisfied with their current quality of life. Korea had the lowest level of satisfaction at 46% and India had the highest at 89%. In Australia’s case, 77% said they were satisfied.
Optimism for the future scored highly with an 11 nation average of 72%. India was most optimistic at 91% and China not far behind on 88%. Hong Kong (79%), Indonesia (79%) and the Philippines (77%) also had high responses. Australia was around average with 71%.
Asked if their parents taught them to be financially responsible, the 11 nation average was 69%. Australians were again at the bottom of the pack with 52% saying they ‘strong agreed’ or ‘agreed’. Those from China (85%), India (80%) and Indonesia (80%) gave their parents the thumbs up.
Attitudes to investing also varied and it was here Australians showed they were a more risk taking bunch. Asked if they were staying out of the sharemarket due to the recent volatility, 60% of Indian and 58% of Taiwanese respondents agreed. Korean (33%), Australian (39%) and Filipino (39%) respondents were least likely to put their investment dollars elsewhere.
Tania Browne concluded: “We’re aware there are many other qualitative factors that impact the results of our research. Comparing a developing China to Australia may seem like comparing apples and orange but even with this in mind, there are some interesting and relevant findings. Some aspects of personal finances are universal, but with financial institutions exploring new markets in Asia Pacific, the result show the need to be mindful of the differences between nations and is a timely reminder that a one size fits all approach is unlikely
to be successful.”
For more info: http://www.citibank.com.au
###
