Financial literacy - Women understanding money

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Financial literacyWomen understanding moneyFinancial literacy Women understanding moneyFinancial literacyWomen understanding money Commonwealth of Australia 2008ISBN: 978 1 74207 648 5This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Commonwealth. Requests and inquiries concerning reproduction and rights should be addressed to the Commonwealth Copyright Administration, Attorney Generals Department, Robert Garran Offices, National Circuit, Barton ACT 2600 or posted at http://www.ag.gov.au/cca. ii.CONTENTSForeWord ivFrom the chairman vexecutive Summary 1FINDINGS AT A GlANCe 2SOme OBSeRvATIONS 5chapter 1: introduction 8The SuRvey IN CONTexT 8SuRvey AND RepORT OveRvIew 9chapter 2: hoW Women manage money 10BuDGeTING 10SAvING 12INveSTING 14CReDIT AND DeBT 16plANNING AND ReTIRemeNT 18pROTeCTING mONey 20INFORmATION AND ADvICe 22CONCluSION 25iii.Financial literacy Women understanding moneychapter 3: What Women think about money 27INTRODuCTION 27ABIlITy AND uNDeRSTANDING 28leARNING 30CONFIDeNCe 31ATTITuDeS AND BehAvIOuRS 34CONCluSION 54appendix 1: FINANCIAL LITERACY AUSTRALIANS UNDERSTANDING MONEY Summary oF FindingS 57appendix 2: FindingS 61appendix 3: Survey methodoLogy 70appendix 4: FinanciaL Literacy Foundation 74iv.FOrEwOrdThe Australian Government recognises the importance of creating opportunities for all Australians to learn more about money and in this regard I am pleased to introduce the Financial literacy Foundations Financial literacy Women understanding money report.This report builds on the findings of the Financial literacy Australians understanding money report, which examines the attitudes and behaviours of all Australians when it comes to using and managing money, by examining the findings for women in greater detail.women have more choices about how they manage their money than ever before. There are credit cards, mobile phones, internet banking, and a range of investment options. women are often the ones making day-to-day spending decisions, as well as important decisions about their financial future.In this context I am pleased to support the recommendation of the house of Representatives Standing Committee on economics, Finance and public Administrations report on Improving the superannuation savings of people under 40, that the Foundation, in association with the Office for women, respond to the financial literacy needs of women with respect to superannuation.The Foundation and the Office for women have created Women Understanding Money, a financial literacy resource for women of all ages that discusses financial issues of personal interest to women and frames superannuation in the context of broader money management issues. It consists of a series of 14 information sheets and is freely available in print and electronic form either by contacting the Foundation or visiting the Foundations website www.understandingmoney.gov.au. It will also be available through a range of other government, industry and community sector sources.This report represents an important complement to the Women Understanding Money resource. It contains valuable insights for those involved in the development and delivery of financial literacy resources and services for women. It presents womens views about the money management issues where they are interested in learning more. Investing, planning for the future and retirement feature prominently amongst these. It also provides valuable information about the way women prefer to learn and measures the extent to which certain attitudes can stop women from learning. Again, these attitudes have a significant impact on the way women manage their money when it comes to planning and retirement.I commend the report to you.Senator the hon nick Sherry minister for Superannuation and Corporate lawApril 2008v.Financial literacy Women understanding moneyFrOm ThE ChairmaNwelcome to the second of the Financial literacy Foundations reports on Australians and money.The first report, Financial literacy Australians understanding money, takes a detailed look at Australians and their money: how we manage it and what we think about it, as well as what we need to learn and what stops us from learning. This report, Financial literacy Women understanding money, takes a closer look at the findings for women.There are some basic facts about women and money that are well recognised: lower average incomes, broken work patterns usually for family reasons lower participation rates when it comes to superannuation and in the end, less superannuation. Not only that, womens savings need to go further because they live longer. Theres absolutely no doubt that these are big issues for many women and their families, and theyre important to keep in mind in any discussion about women and money.Some of the findings of this research will also sound familiar: women tend to be less confident in their ability to manage money, less comfortable with their financial situation and more conservative in their approaches to managing money. But theres a lot more to it than that.If you take a closer look at the findings, youll see some inconsistencies that indicate that both women and men tend to overestimate their ability to manage money well. Confidence can be a great thing in life, but too much of it can get in the way of learning and in this case, learning to manage money better. The interesting thing is that, relative to their ability, women are generally more likely to want to learn about managing money better. when it comes to taking charge of your money, theres no better place to start than wanting to learn.This report tells us that many women already have the budgeting and saving habits that are essential to putting yourself in charge of your money. when it comes to investing, planning for the future and retirement all the things that allow you to take control of your money in the longer term women are less confident in their ability. The important thing is that women want to learn more about these issues.To make the most of this desire to learn, we need to respond to what women say they are looking for when it comes to managing money better information that meets their needs, responds to their concerns and comes from the sources they prefer. This report is an incredibly rich source of information for anyone working with women to achieve their financial goals and I encourage you to make use of it.paul clitheroe Chairman, Financial literacy Foundation Advisory BoardApril 2008vi.1.Financial literacy Women understanding moneyExECuTivE SummaryFinancial markets have developed substantially in the context of long-term reforms directed at increasing market efficiency and consumer choice, with consequential benefits for individuals and the wider economy. Financial literacy initiatives are directed at providing Australians with the knowledge and skills to take advantage of the increased opportunities and choices offered by more sophisticated financial markets. In the context of an ageing population, successive initiatives by government have also resulted in a substantial flow of consumer savings to superannuation, further underlining the importance of consumers having the capacity and the confidence to make informed financial decisions.more competent, confident and engaged consumers of financial services offer the prospect of improved household savings performance, reduced dependence on Government allowances, and lower levels of problem debt.1 more broadly, they can drive competition and market efficiency, reduce costs for business and create the potential for reduced regulatory intervention.2For these benefits to be achievable, consumers need to have the ability to make informed judgements and to take effective decisions regarding the use and management of money. 3 The wide range of consumers individual abilities and understanding, attitudes and behaviour, and needs and preferences, further extends the challenge of providing consumers with the motivation, knowledge and skills to make informed choices in engaging with financial services markets.The scope of the task for governments and other financial literacy service providers is broader and more challenging than simply providing comprehensive and well-intentioned education resources. There is no shortage of quality resources available to consumers with an active interest in building their money skills. The challenge is to promote engagement and motivation for those who, either through lack of exposure to learning opportunities or lack of engagement with existing information and resources, are not seeking to build their money skills.The findings of the Financial literacy Australians understanding money report, a summary of which is at appendix 1, made a significant contribution to our understanding of Australians attitudes and behaviours when it comes to using and managing money, as well as the attitudes that stop people from engaging with money issues. This report builds on those findings, by examining the findings for women in greater detail and comparing them with the findings for men. The findings relate to respondents self-assessed ability, understanding, attitudes and behaviour in using and managing money, complementing the findings from other Australian surveys that aimed to provide an objective measure of competency in financial matters.1 The September 2007 report on Home loan lending by the house of Representatives Standing Committee on economics, Finance and public Administration concluded that the work of the Financial literacy Foundation was important to improving financial literacy so that consumers understand the implications of their decisions when taking on excessive debt, pp. 29-31.2 Financially educated consumers help increasingly complex financial markets to operate efficiently. By their greater ability to compare risk-return characteristics of different financial products offered by various intermediaries (as well as differing costs involved), financially literate consumers enhance competition. In addition, by demanding products more responsive to their needs, they also encourage providers to develop new products and services, thus increasing competition in financial markets, innovation and improvement in quality. OeCD, Improving financial literacy: analysis of issues and policies, p. 35.3 S Schagen and A lines, Financial Literacy in Adult Life, National Foundation for educational Research, Slough, united Kingdom, 1996, p. ii.2.FindingS at a gLancehow women manage moneyBudgetingwomen are highly confident in their ability to budget, but around a half say that they dont budget regularly. while women report better budgeting habits than men, they are less likely to think theyd get by in a financial emergency.91% of women say they have the ability to budget (men 90%) 80% say they think about ways to reduce their spending (men 78%) 44% say they do not budget regularly for their day-to-day finances (men 52%) 77% say they could get by for some time in case of a financial emergency (men 82%)Savingwomen are highly confident in their ability to save and the majority of women say they have good savings habits, but one in five say they dont save. women and men report similar attitudes and behaviours when it comes to saving but women are more likely to say they save before they spend.88% of women say they have the ability to save (men 88%) 22% say they dont save (men 21%) 62% say that they save regularly (men 63%) 52% say they save first and spend second (men 48%) 42% say they spend first and save second (men 44%)InvestingCompared to budgeting and saving, fewer women are confident in their ability to invest, but the majority are interested in learning more. women are also less confident than men when it comes to investing, and are less likely to take factors such as risk and return into consideration when making an investment decision.63% of women say they have the ability to invest money (men 75%) 64% say they own or are currently paying off the home they live in (men 60%) 16% say they have an investment property and 43% say they have other investments (men 20% and 49% respectively) 30% would consider both risk and return when choosing an investment (men 38%) 68% are interested in learning more about investing money (men 71%)Credit and debtwomen are highly confident in their ability to deal with credit cards and manage debt. most women say they can manage debt, but some say they only make minimum repayments on credit card debt and loans and that they get into debt by buying things they cant afford. women are less likely than men to say that they have credit cards and loans and more likely to have other sources of debt. women are also less likely to feel comfortable with their level of debt.83% feel confident with credit cards and 88% of women say they can manage debt (men 84% and 90% respectively) 74% say that they regularly pay the total balance owing on their credit card when it is due (men 79%) 18% usually only make the minimum repayment on loans and 14% do the same with credit cards (men 16% and 13% respectively) 21% say they will use debt to buy things they cant afford (men 22%) 71% say they have a credit card, 55% say they have loans and 23% say they have other debt (men 73%, 57% and 21% respectively) 18% of women say they are uncomfortable with their level of debt (men 15%)3.Financial literacy Women understanding moneyPlanning and retirementCompared to budgeting, saving, dealing with credit cards and managing debt, women are less confident in their ability to plan for their long-term financial future and ensure enough money for retirement. women are also less confident than men when it comes to planning for their long-term financial future and ensuring enough money for retirement, but they are interested in learning more about planning for their financial future, including in retirement.77% of women say they have the ability to plan for their long-term future (men 84%) 60% say they have the ability to ensure enough money for retirement (men 65%) 78% say they have a superannuation fund (men 84%) 12% say employer funded superannuation will meet their retirement needs (men 16%) 74% say they have personally thought about long-term financial plans for the future and retirement (men 78%) 78% are interested in learning more about planning for their long-term financial future and 72% are interested in learning more about ensuring enough money for retirement (men 77% and 70% respectively)Protecting moneywomen are highly confident in their ability to protect their money, including through choosing appropriate insurance, understanding rights and responsibilities when dealing with money, and recognising a scam. however, fewer women are confident in their ability to invest and the findings indicate that the majority wouldnt take key considerations into account when making an investment decision, so they may be more vulnerable to scams than they think. women and men report similar attitudes and behaviour when it comes to protecting money.81% of women say they have the ability to choose appropriate insurance (men 82%) 85% say they understand their rights and responsibilities when dealing with money (men 86%) 87% say they can recognise a scam or an investment scheme that seems too good to be true (men 89%) 63% of women say they have the ability to invest money (men 75%) 70% would not consider both risk and return when choosing an investment (men 62%)Information and advicewomen are highly confident in their ability to get information about money with a majority having sought financial information or advice from an accountant/tax agent or a bank, and just over a half from a financial adviser. Fewer women are confident in their ability to understand financial language, consistent with their level of confidence in ability to invest and ensure enough money for retirement, and most are interested in learning more. women and men report similar abilities in obtaining information about money and dealing with financial service providers but there are substantial differences in their preferred sources of information or advice. women are more likely than men to consider getting information and advice from financial advisors, banks, community services and government sources.84% of women say they have the ability to get information about money (men 85%) 81% say they have the ability to deal with financial service providers (men 82%) 66% say they have used an account/tax agent, and 60% say they have used a bank for financial advice (men 69% and 53% respectively) 60% say they understand financial language and 70% are interested in learning more (men 68% and 66% respectively) 79% say they understand all or most of the information in financial statements (men 80%) 84% say that for financial information and advice they would consider using a financial advisor, 65% a bank, 48% a community service and 33% Centrelink (men 80%, 55%, 36% and 25% respectively)4.What women think about moneyAbility and understandingwomen are generally highly confident in their ability with money, especially when it comes to everyday money management issues like budgeting, saving, dealing with credit and managing debt. Theyre less confident when it comes to more complex issues like investing, understanding financial language and ensuring enough money for retirement, and with these issues theyre also less confident than men.91% of women say they have the ability to budget (men 90%) 88% of women say they have the ability to save (men 88%) 85% of women say they have the ability to understand their rights and responsibilities when dealing with money (men 86%) 83% of women say they have the ability to deal with credit cards (men 84%) 88% of women say they have the ability to manage debt (men 90%) 77% of women say they have the ability to plan for their long-term financial future (men 84%) 63% of women say they have the ability to invest money (men 75%) 60% of women say they understand financial language (men 68%) 60% of women say they have the ability to ensure enough money for retirement (men 65%)Recognition of the importance of learningwomen think its important to learn more about more complex money management issues such as planning for the financial future, understanding rights and responsibilities when dealing with money and ensuring enough money for retirement. Theyre less interested in learning more about everyday money management issues, consistent with their higher levels of confidence in these areas. Recognition of the importance of learning more is generally similar for women and men, but relative to their ability, women are more interested in learning about planning for the future, investing, understanding financial language and ensuring enough money for retirement.78% of women are interested in learning more about planning for their long-term financial future (men 77%) 74% are interested in learning more about understanding their rights and responsibilities when dealing with money (men 73%) 72% are interested in learning more about ensuring enough money for retirement (men 70%) 70% are interested in learning more about understanding financial language (men 66%) 68% are interested in learning more about investing money (men 71%) 57% are interested in learning more about budgeting (men 57%) 66% are interested in learning more about saving (men 64%) 49% are interested in learning more about dealing with credit cards (men 49%) 61% are interested in learning more about managing debt (men 61%)5.Financial literacy Women understanding moneyAttitudes and beliefsSignificant numbers of women hold attitudes and beliefs that can get in the way of them managing their money better from thinking it doesnt matter to finding it stressful, uncomfortable or boring. women are more likely than men to find money stressful, uncomfortable or boring and less likely to feel in control of their financial situation, but theyre less likely to take a short term view or be dismissive of money.52% say that dealing with money is stressful and overwhelming (men 43%) 42% say that thinking too much about their long-term financial future makes them uncomfortable (men 37%) 34% say dealing with money is boring (men 29%) 23% say nothing I do will make a big difference to my financial situation (men 19%) 29% say financially, they like to live for today (men 34%) 52% of women believe that money is just a means to buy things (men 59%)6.Some obServationSA picture of womens attitudes to money and actual money management behaviour is revealed from the findings of this report. while some parts of the picture are consistent, there are also some apparent inconsistencies. Importantly, all findings give insights into the mix of attitudes, beliefs and behaviours that must be addressed if financial literacy initiatives directed at women are to succeed.abiLity, underStanding and recognition oF the importance oF Learning more about money management iSSueS5749616668657072687874676991838888878184816060637785Ensuring enough money for retirementUnderstanding financial languageInvestingPlanning for the financial futureUnderstanding rights and responsibilitiesDealing with financial service providersGetting information about moneyChoosing appropriate insuranceRecognising a scamSavingManaging debtDealing with credit cardsBudgeting% of women aged 18 years and olderImportance of learning moreAbility and understanding7.Financial literacy Women understanding moneyIn the Financial literacy Australians understanding money report, operational confidence in dealing with money issues was defined as the gap between self-assessed ability to deal with a particular issue and recognition of the importance of learning. The same measure is used in this report. On this basis, confidence levels for women are higher for less complex or frequently encountered money management issues like budgeting, dealing with credit cards, managing debt and saving, and lower for more complex and less frequently encountered issues such as investing, understanding financial language and ensuring enough money for retirement. The concept of operational confidence is discussed further in chapter 3.while, at the least, a majority of women are confident in their ability in all 13 money management issues, some do not have good money management habits, particularly in areas where they are relatively less confident in ability, such as investing, but also in areas of high confidence in ability where recognition of the importance of learning is relatively low, such as dealing with credit cards.The tendency for money behaviour to be at odds with self-assessed ability may be explained in a variety of ways. An ability to prepare a budget or commit to a regular savings plan doesnt necessarily lead to budgeting or saving on a regular basis.procrastination can be a factor. As with most money issues, there may be little or no adverse short term consequences in someone, for example, recognising that they should put a budget or savings plan in place, having the capacity to do so, but putting it off until later.For issues where operational confidence is high but significant proportions of women reported behaviour that could not be said to be financially literate, there may be attitudes at play which impede either awareness of the need to learn, or the progression from awareness to learning and action. For these women, a lack of technical ability does not appear to be the issue so much as the learning and action having a perceived lack of relevance and importance.The survey reveals a range of money attitudes and beliefs that are inimical to people investing the time and effort required in taking the steps to improve their money skills and behaviour. As the survey indicates, stress and discomfort, boredom and disinterest, and personal relevance and procrastination, are commonly held attitudes when it comes to money.For those concerned with delivering financial literacy services and resources to women there is much to be drawn from this report. A key consideration to emerge relates to the practicalities of building pathways to effective engagement with money issues of putting appropriate emphasis on motivation in design and delivery strategies by promoting the personal relevance of better money management, and the prospect of the greater choices and opportunities, security and other quality of life benefits that better money skills can provide.There is no shortage of quality resources already available to those with an active interest in building their money skills. The challenge is to promote engagement and motivation to those who, for reasons of disinterest in the issue, lack of perceived relevance, stress or the other obstacles identified in this report, are not currently seeking to build their money skills.In many ways, the broad observations about womens money management ability, behaviour and attitudes are similar to those noted for the whole adult population in Financial literacy Australians understanding money. while there are many similarities between women and men when it comes to managing and thinking about money, there are also some notable differences. These are discussed in chapters 2 and 3, and detailed in appendix 2.8.ChapTEr 1: iNTrOduCTiONthe Survey in contextFinancial literacy is an issue of growing public policy significance internationally. In recent years, Organisation for economic Cooperation and Development countries such as the united Kingdom, the united States, Australia and New Zealand have taken decisive action at the government level to provide avenues for consumers to build their money skills, recognising that consumers of financial services, and thus the effective operation of financial services markets, face a range of challenges.By giving individuals the opportunity to take advantage of increased competition and choice in financial services, financial literacy can yield positive, tangible and lasting results for individuals, families and the broader community. The benefits include greater personal independence, wellbeing and improved economic prosperity. Businesses benefit from improved staff welfare and consequential improvements in productivity. The financial services market will also operate more efficiently when consumers are better informed and more confident in exercising the choices available to them.The Financial literacy Foundation (the Foundation) aims to assist all Australians to increase their financial knowledge and better manage their money (see appendix 4 for more information on the role of the Foundation). As part of its work, the Foundation commissioned DBm Consultants to survey a total of 7,500 Australians aged 12 to 75 to gain a better understanding of our attitudes to money: how confident we are and how we behave when it comes to managing our money. The sample consisted of 6,947 adults aged 18 to 75 and 553 youths aged 12 to 17 years. In proportion to their natural incidence in the population, the sample included people from non-english speaking backgrounds, Indigenous Australians and Australians living in rural locations. The final sample was weighted for age, gender and geographic distribution by state and territory, using the Australian Bureau of Statistics 2001 census data. See appendix 3 for more information on the survey methodology.The survey represents a unique contribution to the body of international financial literacy research, as well as to research on financial literacy in Australia. It is designed to complement other Australian surveys that aim to provide an objective measure of competency in financial matters, and to contribute to a broader understanding of financial literacy in Australia by examining respondents self-assessed ability, understanding, attitudes and behaviour in regard to using and managing money.9.Financial literacy Women understanding moneySurvey and report overvieWThe Foundations research report, Financial literacy Australians understanding money, identified some significant differences between the behaviour of women and men when it comes to managing and thinking about money (see appendix 1 for a summary of the reports findings). This report builds on those findings, examining these differences in greater detail and providing a more complete picture of the attitudes and behaviours of women with respect to managing money.Of the 7,500 people surveyed, 4,138 were women over the age of 18. It is the findings for this group that form the basis of this report. The significant sample size has allowed the data for women to be broken down by both age and household income: a level of detail not included in the earlier report. A consolidated set of the data for women is provided at appendix 2.This report is similar in structure to that of the Financial literacy Australians understanding money report. Following this introductory chapter, chapter 2 sets out womens responses to a series of questions regarding their attitudes to money and money management behaviour across seven money topics and 13 corresponding money management issues.topic money management issuesBudgeting BudgetingSaving SavingInvesting InvestingCredit and debt Dealing with credit cardsmanaging debtplanning and retirement planning for the long-term financial futureensuring enough money for retirementprotecting money Choosing appropriate insuranceunderstanding rights and responsibilitiesRecognising a scamInformation and advice understanding financial languageDealing with financial service providersGetting information about moneychapter 3 examines the relationship between womens self-assessed ability and understanding and other elements of their survey responses, including how they put their money management skills into practice. This chapter also examines survey responses to nine specified attitudes about money and the impact that these have on behaviour.The report concludes with a series of appendices covering:a summary of findings from the Financial literacy Australians understanding money report (appendix 1);the survey findings for women, broken down by age and household income ( appendix 2);the survey methodology ( appendix 3); andinformation about the Financial literacy Foundation ( appendix 4).10.ChapTEr 2: hOw wOmEN maNagE mONEyIn this Chapter, other than where indicated, differences between the genders have been included in the comparative charts and associated discussion only where they are statistically significant at the 95% confidence level.budgetingWomen are highly confident in their ability to budget, but around a half say that they dont budget regularly. While women report better budgeting habits than men, they are less likely to think theyd get by in a financial emergency.Budgeting is a simple activity that helps people to track their income and expenses. The benefits of using a budget to put savings to good use and increase broader money management skills can help people achieve financial goals that have significant and lasting value.most women are highly confident in their ability to budget (91%), the highest of any issue covered by the survey. Consistent with high reported confidence levels, only around half of all women recognise the importance of learning more about budgeting (57%), the second lowest for the issues covered by the survey.most women consider that they are easily able to keep track of their everyday spending (82%) and think about ways to reduce spending (80%). In addition, most women say that they could get by for some time in case of a financial emergency (77%), and a majority consider that they would not have problems setting money aside for big purchases or spending (69%).Despite womens high levels of confidence in their ability, and generally reporting good budgeting habits, around half report that they do not budget regularly for their day-to-day finances (44%).budgeting WomenS attitudeS and behaviour Able to keep track of spendingThink about ways to reduce spendingCould get by in a financial emergencyDont have problems setting money aside for big purchasesDont budget regularly8280776944% of women aged 18 years and older11.Financial literacy Women understanding moneydifferences between genderswomen generally report better budgeting habits than men.women and men report similar levels of ability and understanding with budgeting day-to-day finances, but women are much more likely than men to regularly do a budget for their day-to-day finances and more likely to think about ways to reduce their spending.Despite this, women feel less comfortable about their financial position than men, with fewer reporting that they could get by for some time in case of a financial emergency.budgeting diFFerenceS betWeen genderSBudgeting - abilityThink about ways to reduce spendingDont budget regularlyCould get by in a financial emergency% of respondents aged 18 years and olderWomen Men919080784452778212.SavingWomen are highly confident in their ability to save and the majority of women say they have good savings habits, but one in five say they dont save. Women and men report similar attitudes and behaviours when it comes to saving but women are more likely to say they save before they spend.The key to successful saving is to start early, no matter how small the savings. Through successful saving, people are more likely to have an improved ability to cope with unexpected expenses or financial emergencies. They can also experience less stress and uncertainty regarding their ability to meet their financial needs, particularly as they progress towards meeting their financial goals.most women are highly confident in their ability to save (88%), the second highest of the issues covered by the survey. In addition, the majority of women recognise the importance of learning more about saving (66%).most women say that they have a special savings account used just for savings (73%), save regularly (62%), and agree that the best way to save money is to save a small amount regularly, starting young (75%).when it comes to the manner of saving, women are more likely to say they save before they spend (52%), and less likely to spend before they save (42%). however, many women say that they dont save (22%).Saving WomenS attitudeS and behaviour627552422273Don't saveSpend before savingSave before spendingAgree best way to save is to save regularly, starting youngSave regularlyHave a dedicated savings account% of women aged 18 years and older13.Financial literacy Women understanding moneydifferences between genderswhile the behaviour of women and men is fairly similar when it comes to saving, women are more likely than men to report that they save before they spend and more likely to recognise the importance of learning more about saving.Saving diFFerenceS betWeen genderSWomen Men48646652Saving - interest in learningSave before spending% of respondents aged 18 years and older14.inveStingCompared to budgeting and saving, fewer women are confident in their ability to invest, but the majority are interested in learning more. Women are also less confident than men when it comes to investing, and are less likely to take factors such as risk and return into consideration when making an investment decision.Investing means making money work harder, and investments dont have to be big to be worthwhile. Investing is one way that people can make the most of their savings. For many people, successful investing is the key to security and choice during their working lives and retirement.Compared to budgeting and saving, fewer women are confident in their ability to invest (63%) the third lowest reported level of ability. while the majority of women recognise the importance of learning more about investing (68%), this rate is relatively low compared to the reported level of ability.The majority of women say that they own or are currently paying off the home they live in (64%). Some women own or are currently paying off an investment property (16%), and just under a half say that they have other investments (43%).A number of findings are consistent with a relative lack of confidence in investing. less than a third of women would consider risk and return when making an investment decision (30%), and few would consider background information such as the reputation of the company (5%) and diversification (5%). however, the majority of women recognise that the risks and returns of an investment are unpredictable (67%).inveSting WomenS attitudeS and behaviour6730431664Agree that risks and returns are unpredictableConsider risk and return when making an investmentHave other investmentsHave investment propertyOwn or paying off home% of women aged 18 years and older15.Financial literacy Women understanding moneydifferences between gendersCompared to men, women reported that they are less confident in their ability to invest and less likely to engage in investing, outside home ownership.when it comes to holding investments, women are more likely than men to report that they own or are currently paying off the home they live in. however, women are less likely than men to report that they own or are currently paying off an investment property, and much less likely to have other investments.women are much less likely than men to say that they would consider risk and return when making an investment decision. however, women are more likely than men to recognise that the risks and returns of an investment are unpredictable.inveSting diFFerenceS betWeen genderSWomen Men% of respondents aged 18 years and older4975713863206064164363686730Agree that risks and returns are unpredictableConsider risk and return when making an investmentInvesting - interest in learningInvesting - abilityHave other investmentsHave investment propertyOwn or paying off home16.credit and debtWomen are highly confident in their ability to deal with credit cards and manage debt. Most women say they can manage debt, but some say they only make minimum repayments on credit card debt and loans and that they get into debt by buying things they cant afford. Women are less likely than men to say that they have credit cards and loans and more likely to have other sources of debt. Women are also less likely to feel comfortable with their level of debt.Credit cards can be effective and convenient tools, and loans can be an essential part of achieving longer term goals such as buying a home, but their costs, including repayments and fees and charges, should be understood and affordable.most women are highly confident in their ability to manage debt (88%) and deal with credit cards (83%). while the majority of women recognise the importance of learning more about managing debt (61%), only around a half do so when it comes to dealing with credit cards (49%).most women say that they have a credit card (71%), and regularly pay the total balance on their credit card when it is due (74%). however, some women say they typically only make the minimum repayment on their credit card (14%). most women also say that they wont buy things that they cant afford (76%), and that they feel comfortable with their level of debt (77%). most women agreed that there is no better way of saving money than paying off debt early (86%).Around half of women say they have loans including mortgages, car loans and investment loans (55%), and many women report having other debts, such as hire purchases and loans for tertiary education (23%). most women say that they usually make more than minimum repayments on their loans (80%).credit and debt WomenS attitudeS and behaviour717477865523807614Make more than minimum repayment on loanHave other debtHave loanNo better way of saving than paying off debt earlyComfortable with level of debtWon't buy things I can't affordOnly make minimum repayment on credit cardPay total credit card balance when dueHave a credit card% of women aged 18 years and older17.Financial literacy Women understanding moneydifferences between genderswomen are less likely than men to report that they have the ability and understanding to manage debt, and more likely to report that they are uncomfortable with their level of debt. women are also less likely than men to report that they have a credit card and much less likely to pay the total balance owing on it when due. women are more likely to report that they have debts other than loans and credit cards. women are more likely than men to say that there is no better way of saving money than paying off debt early.credit and debt diFFerenceS betWeen genderSWomen Men% of respondents aged 18 years and older831873211590712323188886Don't pay total credit card balance when dueHave a credit cardHave other debtUncomfortable with level of debtManaging debt - abilityNo better way of saving than paying off debt early18.pLanning and retirementCompared to budgeting, saving, dealing with credit cards and managing debt, women are less confident in their ability to plan for their long-term financial future and ensure enough money for retirement. Women are also less confident than men when it comes to planning for their long-term financial future and ensuring enough money for retirement, but they are interested in learning more about planning for their financial future, including in retirement.planning is the best way to achieve security in the long term and in retirement, and the earlier people put their plan into action, the more choices they will have. The advantage of starting young is that savings can grow steadily over time.while most women are confident in their ability to plan for their long-term financial future (77%), this is also the issue where the greatest proportion of women recognise the importance of learning more (78%).women reported relatively low levels of ability with respect to ensuring enough money for their retirement (60%) the second lowest level of ability reported by women. however, most women recognise the importance of learning more about ensuring enough money for retirement (72%), which is consistent with the relatively low level of reported ability.most women agree that financial planning is not only important for those who have a lot of money (83%), while the majority disagree that retirement is too far away to think about (64%), and have personally thought about their long-term financial plans for the future and retirement (74%).most women have a superannuation fund (78%) but do not think employer funded superannuation will be sufficient for retirement (73%). most do not believe the age pension will be sufficient (86%).pLanning and retirement WomenS attitudeS and behaviour647478738683The age pension will not be sufficient for retirementEmployer funded superannuation will not be sufficient for retirementHave a superannuation fundHave thought about long-term financial plansRetirement is not too far away to think aboutFinancial planning is not only for those with a lot of money% of women aged 18 years and older19.Financial literacy Women understanding moneydifferences between genderswomen are much less likely than men to say they have the ability and understanding to ensure they will have enough money for their retirement, and to plan for their long-term financial future. however, women are more likely than men to recognise the importance of learning more about ensuring they have enough money for their retirement. They are also more likely to recognise that financial planning is not just important for those who have a lot of money. however, despite women being more likely to recognise the importance of these issues, men are more likely than women to say that they have personally thought about long-term financial plans for the future and retirement.women are much less likely than men to say they have a superannuation fund. Consistent with the lower rates of superannuation coverage among females, women are also less likely than men to say that employer funded superannuation will be enough to cover their retirement needs.pLanning and retirement diFFerenceS betWeen genderSWomen Men% of respondents aged 18 years and older8416788170846583747277601278Have thought about financial future and retirementFinancial planning is not just for those with a lot of moneyEnsure enough money for retirement - learningPlan for long-term future - abilityEnsure enough money for retirement - abilityEmployer funded super will be enough for my retirementHave a superannuation fund20.protecting moneyWomen are highly confident in their ability to protect their money, including through choosing appropriate insurance, understanding rights and responsibilities when dealing with money, and recognising a scam. However, fewer women are confident in their ability to invest and the findings indicate that the majority wouldnt take key considerations into account when making an investment decision, so they may be more vulnerable to scams than they think. Women and men report similar attitudes and behaviour when it comes to protecting money.protecting money means protecting people, their assets and income for security and peace of mind but theres more to protecting money than buying insurance. It also means understanding the risks of an investment decision, spreading risk by not putting all your eggs in one basket, and being wary of scams. If an investment opportunity seems too good to be true, it probably is.most women are confident in their ability to choose appropriate insurance (81%), and the majority recognise the importance of learning more (65%). however, choosing insurance only ranks eighth for women in terms of ability and understanding, while ranking tenth in terms of recognising the importance of learning.most women hold some form of insurance (87%), and believe in taking out insurance to be prepared for the unexpected (84%).most women are confident in their ability to understand their rights and responsibilities when dealing with money (85%) and recognise the importance of learning more (74%), the second highest learning response for money management issues covered by the survey.most women are confident in their ability to recognise an investment scam (87%), and the majority recognise the importance of learning more (68%). however, less than a third of women would consider risk and return when making an investment decision (30%), and very few would consider background information such as the reputation of the company (5%) and diversification (5%).protecting money WomenS attitudeS and behaviour308487Consider risk and return whenmaking an investmentBelieve in taking out insuranceto be prepared for the unexpectedHave insurance% of women aged 18 years and older21.Financial literacy Women understanding moneydifferences between genderswhen it comes to protecting money, the reported attitudes and behaviours of women and men are fairly similar. however, women are more likely than men to report that they believe in taking out insurance to be prepared for the unexpected, and less likely than men to say they have the ability and understanding to recognise a scam.protecting money diFFerenceS betWeen genderSWomen Men% of respondents aged 18 years and older79898784Recognising a scam - abilityBelieve in taking out insuranceto be prepared for the unexpected22.inFormation and adviceWomen are highly confident in their ability to get information about money with a majority having sought financial information or advice from an accountant/tax agent or a bank, and just over a half from a financial adviser. Fewer women are confident in their ability to understand financial language, consistent with their level of confidence in ability to invest and ensure enough money for retirement, and most are interested in learning more. Women and men report similar abilities in obtaining information about money and dealing with financial service providers but there are substantial differences in their preferred sources of information or advice. Women are more likely than men to consider getting information and advice from financial advisors, banks, community services and government sources.Collecting and understanding information is essential to good money management, and sometimes its important to get help. Information and advice are often thought of in relation to investment and taxation issues, but they can relate to anything from doing a budget to getting debt under control and understanding rights and responsibilities.most women are confident in their ability to get information about money (84%), and the majority recognise the importance of learning more (69%). most women are confident in their ability to deal with banks or other financial service providers (81%), and the majority recognise the importance of learning more (67%).Compared to other money management issues, fewer women are confident in their ability to understand financial language (60%), in fact, this is the lowest reported level of ability for any money management issue covered by the survey. however, the majority of women recognise the importance of learning more (70%).most women say they spend a lot of time thinking about financial information before making a financial decision (74%). This contrasts with the findings regarding investing, where relatively low proportions of women would consider key issues before making an investment decision.most women say they read their financial statements regularly (94%), and the majority read them every time (64%). most women say that they understand all or most of the information in their financial statements (79%).inFormation and advice WomenS attitudeS and behaviour749479Understand all or most of theinformation in financial statementsRead financial statements regularlySpend a lot of time thinking aboutinformation before making a decision% of women aged 18 years and older23.Financial literacy Women understanding moneydifferences between genderswomen are much less likely than men to report they have the ability to understand financial language, but are more likely to recognise the importance of learning more.women are more likely than men to say that they spend a lot of time thinking about financial information before making a financial decision. women are less likely than men to report that they have used an accountant or tax agent for financial information or advice, but are much more likely to report that they have used a bank for these services.inFormation and advice diFFerenceS betWeen genderSWomen Men% of respondents aged 18 years and older68667269536070746066Have used a bank for financial information or adviceHave used an accountant/tax agentfor financial information or adviceSpend a lot of time thinking aboutinformation before making a decisionUnderstanding financial language - learningUnderstanding financial language - abilityThere are some substantial differences between women and men when it comes to preferred sources of information and advice. women are more likely than men to report that they would use formal sources such as financial advisers, banks, and face-to-face sources such as community services and Centrelink. women are less likely than men to say that they would use informal sources such as work and friends, and print and electronic sources such as newspapers, magazines and the internet.24.Where peopLe Say they WouLd Seek FinanciaL inFormation or advice(SOme OF The GeNDeR DIFFeReNCeS mAy NOT Be SIGNIFICANT AT The 95% CONFIDeNCe level)Women Men% of respondents aged 18 years and older50512541325036495457635581804847444433303250515363658184TV/radioWorkCentrelinkBusiness/money related magazinesNewspapersInternet websiteCommunity servicesGovernment websiteSeminars/educational institutionsFriendsFamilyBankAccountant/tax agentFinancial adviserwhile women report they are most likely to consider using financial advisers, then accountants and tax agents for financial information and advice, their actual behaviour does not reflect this. The majority of women say that they have actually seen an accountant/tax agent (66%) or a bank (60%), but only around half say that they have seen a financial adviser (54%).25.Financial literacy Women understanding moneyconcLuSionThe findings of this Chapter indicate that:Although women are generally confident in their ability to manage money, some do not have good management habits, both for issues where confidence in ability is high, such as budgeting, saving, and dealing with credit cards, and for issues where confidence in ability is relatively low, such as investing. For example:around a half report that they dont regularly budget for day-to-day expenses; around a fifth report that they are not easily able to keep track of everyday spending, could not get by for some time in case of a financial emergency, or do not think about ways to reduce their spending;around a fifth dont save; around a fifth would get into debt buying something they cant afford; around a quarter dont pay the total balance owing on their credit card when it is due; and less than a third would consider both risk and return when making an investment decision. while womens reported confidence in their ability to manage money is generally high, confidence is higher for day-to-day money management issues than it is for more complex and less frequently encountered issues.Confidence in ability is over 70% for all money management issues except investing (63%), ensuring enough money for retirement (60%), and understanding financial language (60%).The main inconsistency in womens reported confidence in their ability relates to recognising scams. women are highly confident in their ability to recognise scams, but relatively less confident when it comes to investing and understanding financial language. Combined with relatively low levels of recognition of some important aspects of investing which are also key to recognising scams, overall levels of confidence in recognising scams may not be well founded. This may, in turn, indicate a higher degree of vulnerability to scams.In general terms, the findings indicate that women and men have similar day-to-day money management behaviour, but apart from budgeting, women are less confident in ability than men, particularly in relation to the more complex issues. women also tend to be less comfortable with their financial situation and more conservative in their behaviour. For example:although women are much more likely than men to report that they regularly budget for day-to-day finances and more likely to think about ways to reduce spending, they are less likely to report that they could get by in case of a financial emergency;women are slightly more likely 4 than men to report that they have a separate account that is used just for savings, and more likely to save before they spend;women are more likely to invest in the home they live in but less likely to invest in investment properties; women are much less likely than men to have investments such as shares, bonds, managed funds, debentures and unit trusts;while women are more likely than men to agree that the risks and returns of an investment are unpredictable they are also much less likely to consider risk and return when making an investment decision;women are less likely than men to report that they have credit cards and loans but more likely to report that they have other types of debt such as school fees, hire purchase and higher education loans;4 But not significant at the 95% confidence level26.women are more likely than men to believe that there is no better way of saving than paying off debt early, but less likely to report that they pay the total amount owing on a credit card;women are more likely than men to feel uncomfortable with their level of debt; women are much less likely than men to have a superannuation fund and much less likely to report that they have the ability to plan for their long-term future and ensure enough money for retirement;women are less likely to have personally thought about long-term financial plans for the future and for retirement, even though they are much more likely to recognise the importance of planning ahead when they start work;women are slightly more likely 5 than men to report that they have insurance and much more likely to report that they believe in taking out insurance to be prepared for the unexpected;women are less likely than men to report that they have the ability to recognise a scam or investment scheme that seems too good to be true, consistent with lower levels of confidence in their ability to invest and understand financial language;women are more likely than men to spend a lot of timing thinking about financial information before making a financial decision;women are much more likely than men to consider using financial advisers, banks, community services and Centrelink for financial information or advice;women are much more likely than men to have actually used a bank for financial information or advice and less likely to have actually used a financial adviser; andwomen are much less likely than men to consider using newspapers, business and money magazines and the workplace as sources of financial information or advice.5 But not significant at the 95% confidence level27.Financial literacy Women understanding moneyChapTEr 3: whaT wOmEN ThiNk abOuT mONEyintroductionThis Chapter examines the issue of confidence using the relationship between respondents self-reported levels of ability and understanding, and recognition of the importance of learning more as an indicator of confidence for each of the 13 money management issues covered by the survey.6It also examines the attitudes and behaviours that can adversely affect financial literacy by:preventing people from being aware of financial literacy issues; impeding financial literacy learning and education; and preventing knowledge and understanding from being translated into actual behaviour. Attitudes and behaviours interact in complex, overlapping and mutually reinforcing ways, often depending on the individuals stage of life and their particular personal and financial circumstances. Due to this complexity and interdependence, it is not easy to understand how one functions in complete isolation from others.what people think and feel about money issues impacts upon how receptive they are to learning about money. Overcoming and managing these attitudes is an important part of improving peoples ability and willingness to engage with their money in an informed way.Combined with any difficulties people experience in assessing their true level of ability and understanding about money issues, they can have beliefs and emotions that affect their self-assessment of ability and understanding, and their progress towards a particular financial outcome.6 In Chapter 2, confidence is discussed in terms of respondents self-reported ability for each of the 13 money management issues.28.abiLity and underStandingFor day-to-day money management issues where women are more likely to have regular and direct experience, their self-assessed level of ability and understanding is higher. Conversely, where the issues are less frequently encountered and/or require more specialised knowledge, such as investing, ensuring enough money in retirement and understanding financial language, the self-assessed level of ability and understanding is lower. Additionally, women generally reported lower levels of ability than men across the 13 money management issues, with a larger gap for the more complex issues.abiLity and underStanding about money matterS i have the abiLity and underStanding in Women Men% of respondents aged 18 years and older9088908986858482686575848291888887858460606377818183Understanding financial languageEnsuring enough money for retirementInvestingPlanning for the financial futureDealing with financialservice providersChoosing appropriate insuranceDealing with credit cardsGetting information about moneyUnderstanding rightsand responsibilitiesRecognising a scamManaging debtSavingBudgeting29.Financial literacy Women understanding moneydifferences between genderslevels of reported ability are generally lower for women than they are for men, however the differences are statistically significant at the 95% confidence level for seven of the 13 money management issues.women are more likely than men to report that they have the ability and understanding to budget day-to-day finances.women are less likely than men to report that they have the ability and understanding to:manage debt; recognise an investment scam; invest; plan for the long-term financial future; ensure enough money for retirement; and understand financial language. It is worth noting that while women generally report lower levels of ability than men, this may indicate a more conservative approach to self-assessment of ability rather than a lower level of actual ability.30.LearningConsistent with their reported levels of ability, women attribute greater importance to learning more about relatively complex money management issues that can have significant financial consequences, such as planning for retirement and the long-term financial future, understanding rights and responsibilities when dealing with money, investing and recognising scams. learning more about day-to-day money management issues such as budgeting, dealing with credit cards and managing debt, is regarded as less important. Additionally, women generally reported higher levels of recognition of the importance of learning more about money management issues than did men.importance oF Learning more about money matterSAT ThIS pOINT IN lIFe IT IS ImpORTANT TO leARN mORe ABOuT Women Men% of respondents aged 18 years and older6463615749657169676670737768676665614957686970727478Dealing with credit cardsBudgetingManaging debtChoosing appropriate insuranceSavingDealing with financial service providersInvestingRecognising a scamGetting information about moneyUnderstanding financial languageEnsuring enough money for retirementUnderstanding rights and responsibilitiesPlanning for the financial future31.Financial literacy Women understanding moneydifferences between genderswhile women are generally more likely than men to recognise the importance of learning more about money management issues, the differences are not as large as they are in the case of reported levels of ability. The differences are statistically significant at the 95% confidence level for four issues.women are more likely than men to recognise the importance of learning more about:saving; ensuring enough money for retirement; and understanding financial language. women are less likely than men to recognise the importance of learning more about investing. This is of interest in that women are much less likely than men to say that they have the ability and understanding to invest.conFidenceConfidence in money management is not a bad thing, since it is important that people have the confidence to take financial actions in anticipation of a positive result. however, overconfidence in ability and understanding of money matters can mean that mistakes are made and opportunities missed.A substantial academic literature in cognitive psychology makes the case that people are usually overconfident and, in particular, they are overconfident about the precision of their knowledge.7 In general, people tend to overestimate their ability to do well at tasks, are unrealistically optimistic about future events, and have unrealistically positive self-evaluations.International financial literacy research suggests overconfidence regarding financial knowledge and understanding is a significant issue that impacts upon both the degree to which people seek financial information and advice, and the financial decisions that they subsequently make.8A 2005 OeCD report discusses research across 12 countries that found that respondents felt they knew more about financial matters than was actually the case.9 This was particularly clear in research which combined objective tests (that measured knowledge and understanding of financial terms and ability to apply financial concepts to particular situations), with self-assessment (respondents perceptions of their financial understanding and knowledge).10Respondents in the US, UK, and Australia felt confident in their knowledge of financial issues even though when given a test on basic finance it is clear they had only a limited understanding of these issues. If consumers do not realise they need information, they will not be in a position to seek it. 11Overconfidence reduces demand for financial education and the degree to which people seek financial information and advice. In this study, most respondents reported that they spend a lot of time thinking about financial 7 See T Odean, Volume, Volatility, Price and Profit when all Traders are Above Average, Graduate School of management, university of California - Davis, united States of America, draft April 1998.8 For an overview of overconfidence in relation to financial literacy research, see A lusardi and O mitchell, Financial Literacy and Retirement Preparedness: Evidence and implications for financial education programs, michigan Retirement Research Centre, working paper 2006-144, November 2006, p. 8.9 OeCD, Improving Financial Literacy: Analysis of Issues and Policies, OeCD publishing, paris, France, 2005, pp. 43-44.10 For example, ANZ Survey of Adult Financial Literacy in Australia, conducted by ACNielsen Research, melbourne, November 2005.11 OeCD, op. cit., pp. 43-44. In the 2005 ANZ survey of financial literacy, 67% of respondents said that they understood the principle of compound interest, but only 28% were rated with a good level of comprehension when they solved an actual problem.32.information before making a decision, and most reported that they try to stay informed about money matters. however, some people will consider themselves to be informed when they are not, regardless of whether they have spent a lot of time thinking about financial information before making a decision. If they are overconfident, they may overestimate the effectiveness of spending a lot of time and being informed, and remain unaware of their overconfidence and the adverse impact it may have on how they manage their money.The fact that consumers feel more confident than their actual financial knowledge warrants, suggests that an important aspect of financial education programs is increasing consumers awareness of their need for financial information. If consumers are not aware they need financial information, they will not seek it out. Thus policymakers need to think about the best ways to reach these consumers and convince them that they need financial education. 12using the relationship between respondents self-reported levels of ability and understanding, and recognition of the importance of learning more, as an indicator of confidence assumes that, generally speaking, people who say they have the ability and understanding regarding a particular money management issue are more confident in dealing with that issue than those who say they do not. Conversely, those who recognise the importance of learning more about a particular money management issue are less likely to be confident in dealing with that issue than those who do not.A proxy measure for overall confidence is derived by comparing reported levels of ability and understanding with reported levels of recognition of the importance of learning more. The gap indicates the relative levels of confidence between different money management issues, with a positive gap indicating a relatively higher level of confidence and a smaller or negative gap indicating a lower level of confidence. As with all measures of self-reported confidence, this measure does not indicate that confidence is necessarily well founded in terms of ability, understanding and practice.The table below presents the relative confidence levels across the 13 money management issues for women and men, with higher numbers being indicative of higher confidence levels.reLative LeveLS oF conFidence Women and mentopic (highest to lowest level of confidence) Womens confidence % mens confidence %budgeting 34.0 32.4dealing with credit cards 33.2 34.4managing debt 27.2 28.7Saving 22.0 24.1recognising a scam 18.3 20.3choosing appropriate insurance 16.4 18.6getting information about money 15.5 18.0dealing with financial services providers 13.5 16.7understanding rights and responsibilities 10.7 12.6planning for the financial future -0.9 7.2investing -5.6 3.7understanding financial language -10.4 1.5ensuring enough money for retirement -11.6 -4.412 OeCD, op. cit., p. 45.33.Financial literacy Women understanding moneyFor the purposes of this discussion:large positive gaps (above 20%) indicate high levels of confidence; gaps of between 10% and 20% indicate more moderate levels of confidence; and small (less than 10%) or negative gaps indicate relatively low levels of confidence. A positive gap is evident for issues where levels of exposure and familiarity with particular money management issues are high, and where people are more likely to have a sense of control regarding processes and outcomes. It is also evident that the gap is smaller or negative in areas of greater complexity, greater uncertainty regarding processes and outcomes, and where third parties are involved in transactions.The findings indicate that:Although relative levels of overall confidence vary between women and men, with the exception of budgeting and dealing with credit cards, the 13 money management issues are ranked identically for women and men.The differences between women and men increase with increasing complexity of the issue. Differences are generally less than 2% for the money management issues where confidence is high, generally between 2% and 3% for the money management issues where confidence is more moderate, and much greater (7% to 12%) for the money management issues where confidence is relatively low.with the exception of budgeting, women have lower levels of overall confidence than men. For women, there are four money management issues where reported recognition of the importance of learning more is greater than reported ability and understanding, ie. the gap between the two measures is negative. These four issues: planning for the financial future; investing; understanding financial language; and ensuring enough money for retirement, represent a logical grouping. That is, understanding financial language is integral to investing and investing is integral to both planning for the financial future and ensuring enough money for retirement.For men, the gap between the two measures is negative for only one issue: ensuring enough money for retirement, although mens overall level of confidence is also relatively low for planning for the financial future, investing and understanding financial language.34.attitudeS and behaviourSwhat people think and feel about money issues impacts upon how receptive they are to learning more about money. Some attitudes can be widely held and have a relatively low impact on financial literacy, while others can be narrowly held and have a relatively large impact. Overcoming and managing these attitudes is an important part of improving ability and willingness to engage with money in an informed way.Respondents were asked to assess their level of agreement with nine statements that could be characterised as contributing to poor or suboptimal financial outcomes.attitudeS to moneyI AGRee ThATWomen Men% of respondents aged 18 years and older342923191535374359423829342116235252I (do not) try to stay informed about money matters and financesI (do not) spend a lot of time thinking aboutfinancial information before I make a decisionNothing I do will make a big difference to my financial situationFinancially, I like to live for todayDealing with money is boringMoney is (not) important to be happy in lifeThinking too much about my long-termfinancial future makes me feel uncomfortableDealing with money is stressful and overwhelmingMoney is just a means to buy thingsdifferences between gendersThe differences are statistically significant at the 95% confidence level in relation to seven attitudes.women are more likely than men to believe that:dealing with money is stressful and overwhelming; thinking too much about the long-term financial future causes discomfort; money is (not) important to be happy in life; dealing with money is boring; and nothing they do will make a big difference to their financial situation. 35.Financial literacy Women understanding moneywomen are less likely than men to believe that:money is just a means to buy things; and financially, they like to live for today. The remainder of this Chapter examines each of these attitudes and the strength of their relationship with 20 behaviours that could not be said to be financially literate.The 20 selected behaviours have been drawn from the seven money topics covered in chapter 2:budgeting I am not easily able to keep track of my everyday spendingI do not think about ways to reduce my spendingI have problems setting money aside for big purchases or spendingI do not regularly do a budget for day-to-day financesSaving I did not save any money in the last six monthsI save only when I want something big or specialI do not saveinvesting I would not consider risk and return when making an investment decisioncredit and debt I tend to fall behind on loan repaymentsI usually only pay the minimum amount owing on credit cardsI do not feel comfortable with my level of debtI do not regularly pay the total balance owing on my credit card when it is dueplanning and retirement I believe that financial planning is only important for those who have a lot of moneyI believe that retirement is too far away to think aboutI have not thought about long-term financial plans for the future and retirementprotecting money I do not believe in taking out insurance to be prepared for the unexpectedI do not have insuranceinformation and advice I rarely or never read financial statementsI check only the balance on financial statementsI understand only some or none of the information in financial statementsThe charts that follow compare the proportion of women and men who report behaviours that could not be said to be financially literate, with the proportion of respondents (women and men respectively) who report that they hold a particular attitude. For example, as discussed in the next section of this chapter, women who believe that money is not important to be happy in life are more likely than all female respondents to believe that retirement is too far away to think about. however, men who believe that money is not important to be happy in life are not more likely than all male respondents to believe that retirement is too far away to think about.The nine attitudes have been presented in ascending order of association with the incidence of behaviours.For the purposes of the discussion:attitudes that impact on seven or less behaviours have been assessed as having a relatively minor impact on behaviour;attitudes that impact on between eight and 13 behaviours have been assessed as having a moderate impact on behaviour; andattitudes that impact on 14 or more behaviours have been assessed as having a relatively large impact on behaviour.The impact of attitudes on behaviour is determined in part by whether there is sufficient motivation for the individual to make a behavioural change and, in effect, overcome the barriers that stop them engaging with money. chapter 4 of the Financial literacy Australians understanding money report discusses motivation and building ability in some detail, and how self-efficacy can help to overcome attitudinal barriers.In the following commentaries, all comparisons are significant at the 95% confidence level.36.money is (not) important to be happy in lifeWhile it is true that money cant buy happiness, good money management can make a big difference to peoples lives and therefore their happiness, especially over time.women are more likely than men to say that money is not important to be happy in life (38%/35%). The proportion of women holding this attitude generally increases with age and decreases with household income.women who say that money is not important to be happy in life are more likely than women overall to exhibit only one of the 20 behaviours that are not indicative of financially literate behaviour. Compared to the other attitudes, holding this attitude has the smallest impact on behaviour.For women, this attitude impacts on only one behaviour, which is related to planning and retirement.Differences between genderswomen who hold this attitude are more likely than women overall to believe that retirement is too far away to think about. For men, this is not the case.37.Financial literacy Women understanding moneyimpact oF attitudeS on behaviour money iS not important to be happy in LiFeTend to fall behind on loan repaymentsDidnt save any money in the last 6 monthsRarely or never read financial statementsDont believe in taking out insurance to be prepared for the unexpectedCheck only the balance on financial statementsDont have insuranceUsually only pay the minimum amount owing on credit cardsSave only when wanting something big or specialBelieve financial planning is only important for those who have a lot of money Not easily able to keep track of everyday spendingDont think about ways to reduce spendingDont feel comfortable with level of debtBelieve retirement is too far away to think aboutUnderstand only some or none of the information in financial statementsDont saveDont regularly pay the total balance owing on credit cards when dueHave not thought about long-term financial plans for the future and retirementHave problems setting money aside for big purchases or spendingDont regularly do a budget for day-to-day financesWould not consider risk and return when investing40 x 170mm50% Column Width 020406080 0 20 40 60 800 20 40 60 8002040608080% 60% 40% 20% 0% 20% 40% 60% 80%Overall WomenMenHold attitudeOverall Hold attitude38.money is just a means to buy thingsHolding this attitude can reflect a lack of appreciation or understanding of how money can be made to work and assist in achieving goals. In this sense, money is not just a means to buy things, but a way to achieve broader life goals such as security and peace of mind, as well as more specific goals which may have significant and lasting value. People who agree that money is just a means to buy things may miss significant opportunities to improve their financial wellbeing.women are much less likely than men to say that money is just a means to buy things (52%/59%). The proportion of women holding this attitude generally decreases with age and decreases with household income.women who say that money is just a means to buy things are more likely than women overall to exhibit three of the 20 behaviours that are not indicative of financially literate behaviour. Compared to the other attitudes, holding this attitude has a relatively minor impact on behaviour.For women, this attitude impacts on all three behaviours which relate to planning and retirement. For this group of people, there may not be a full appreciation of moneys capacity to assist in achieving more significant long-term goals.Differences between gendersFor those holding this attitude, there were no differences in behaviour between the genders.39.Financial literacy Women understanding moneyimpact oF attitudeS on behaviour money iS juSt a meanS to buy thingSTend to fall behind on loan repaymentsDidnt save any money in the last 6 monthsRarely or never read financial statementsDont believe in taking out insurance to be prepared for the unexpectedCheck only the balance on financial statementsDont have insuranceUsually only pay the minimum amount owing on credit cardsSave only when wanting something big or specialBelieve financial planning is only important for those who have a lot of money Not easily able to keep track of everyday spendingDont think about ways to reduce spendingDont feel comfortable with level of debtBelieve retirement is too far away to think aboutUnderstand only some or none of the information in financial statementsDont saveDont regularly pay the total balance owing on credit cards when dueHave not thought about long-term financial plans for the future and retirementHave problems setting money aside for big purchases or spendingDont regularly do a budget for day-to-day financesWould not consider risk and return when investing40 x 170mm50% Column Width 020406080 0 20 40 60 800 20 40 60 8002040608080% 60% 40% 20% 0% 20% 40% 60% 80%Overall WomenMenHold attitudeOverall Hold attitude40.nothing i do will make a big difference to my financial situationThis is a unique attitude in that the sense of powerlessness it indicates may prevent any kind of engagement with money. Differences may not be perceived as big if they have low monetary value, or little or no immediate impact. However, differences, including little ones, may have significant meaning or value, especially over time, and therefore doing something like managing money well on a day-to-day basis, will make a big difference.women are more likely than men to say that nothing they do will make a big difference to their financial situation (23%/19%). The proportion of women holding this attitude increases with age and decreases with household income.women who say that nothing they do will make a big difference to their financial situation are more likely than women overall to exhibit 11 of the 20 behaviours that are not indicative of financially literate behaviour, especially three of them. Relative to the other attitudes, holding this attitude has a moderate impact on behaviour.women who hold this attitude are far more likely than women overall to believe that financial planning is only important for those with a lot of money (34%/15%), to not save (36%/22%), and to not have thought about long-term financial plans for their future and retirement (38%/26%).For women, this attitude impacts on 11 behaviours: three relating to planning and retirement, two relating to budgeting, two to credit and debt, one to saving, one to investing, one to information and advice, and one to protecting money.Differences between genderswomen who hold this attitude are more likely than women overall to say they tend to fall behind on their loan repayments, and that they understand only some or none of the information in financial statements. For men, this is not the case.41.Financial literacy Women understanding moneyimpact oF attitudeS on behaviour nothing i do WiLL make a diFFerenceTend to fall behind on loan repaymentsDidnt save any money in the last 6 monthsRarely or never read financial statementsDont believe in taking out insurance to be prepared for the unexpectedCheck only the balance on financial statementsDont have insuranceUsually only pay the minimum amount owing on credit cardsSave only when wanting something big or specialBelieve financial planning is only important for those who have a lot of money Not easily able to keep track of everyday spendingDont think about ways to reduce spendingDont feel comfortable with level of debtBelieve retirement is too far away to think aboutUnderstand only some or none of the information in financial statementsDont saveDont regularly pay the total balance owing on credit cards when dueHave not thought about long-term financial plans for the future and retirementHave problems setting money aside for big purchases or spendingDont regularly do a budget for day-to-day financesWould not consider risk and return when investing40 x 170mm50% Column Width 020406080 0 20 40 60 800 20 40 60 8002040608080% 60% 40% 20% 0% 20% 40% 60% 80%Overall WomenMenHold attitudeOverall Hold attitude42.dealing with money is boringIf people find money boring then no matter how important they acknowledge it to be, they may struggle to actually engage with it.women are more likely than men to say that dealing with money is boring (34%/29%). The proportion of women holding this attitude is fairly consistent across age groups and household income levels.women who say that dealing with money is boring are more likely than women overall to exhibit 12 of the 20 behaviours that are not indicative of financially literate behaviour. Relative to the other attitudes, holding this attitude has a moderate impact on behaviour.For women, this attitude impacts on 12 behaviours: four relating to budgeting, three relating to planning and retirement, three to information and advice, one to investing, and one to credit and debt.Differences between genderswomen who hold this attitude are more likely than women overall to say they usually only pay the minimum amount owing on credit cards, that they dont think about ways to reduce their spending, and that they would not consider risk and return when making an investment decision. For men, this is not the case.men who hold this attitude are more likely than men overall to say they save only when they want something big or special, that they dont feel comfortable with their level of debt, and that they dont save. For women, this is not the case.43.Financial literacy Women understanding moneyimpact oF attitudeS on behaviour deaLing With money iS boringTend to fall behind on loan repaymentsDidnt save any money in the last 6 monthsRarely or never read financial statementsDont believe in taking out insurance to be prepared for the unexpectedCheck only the balance on financial statementsDont have insuranceUsually only pay the minimum amount owing on credit cardsSave only when wanting something big or specialBelieve financial planning is only important for those who have a lot of money Not easily able to keep track of everyday spendingDont think about ways to reduce spendingDont feel comfortable with level of debtBelieve retirement is too far away to think aboutUnderstand only some or none of the information in financial statementsDont saveDont regularly pay the total balance owing on credit cards when dueHave not thought about long-term financial plans for the future and retirementHave problems setting money aside for big purchases or spendingDont regularly do a budget for day-to-day financesWould not consider risk and return when investing40 x 170mm50% Column Width 020406080 0 20 40 60 800 20 40 60 8002040608080% 60% 40% 20% 0% 20% 40% 60% 80%Overall WomenMenHold attitudeOverall Hold attitude44.thinking too much about my long-term financial future makes me feel uncomfortableThis attitude is specifically focused on thinking about money rather than dealing with money and therefore relates to the process of understanding money issues, rather than engaging with them.women are much more likely than men to say that thinking too much about their long-term financial future makes them feel uncomfortable (42%/37%). The proportion of women holding this attitude decreases with both age and household income.women who say that thinking too much about the future makes them uncomfortable are more likely than women overall to exhibit 12 of the 20 behaviours that are not indicative of financially literate behaviour, especially two of them. Relative to the other attitudes, holding this attitude has a moderate impact on behaviour.women who hold this attitude are far more likely than women overall to believe that retirement is too far away to think about (31%/20%), and have problems setting money aside for big purchases or spending (41%/28%).For women, this attitude impacts on 12 behaviours: three relating to planning and retirement, three relating to credit and debt, two to budgeting, two to information and advice, one to protecting money and one to saving.Differences between genderswomen who hold this attitude are more likely than women overall to say that they do not have insurance. For men, this is not the case.men who hold this attitude are more likely than men overall to say they rarely or never read financial statements, that they save only when they want something big or special, and that they would not consider risk and return when making an investment decision. For women, this is not the case.45.Financial literacy Women understanding moneyimpact oF attitudeS on behaviour thinking about my FinanciaL Future makeS me uncomFortabLeTend to fall behind on loan repaymentsDidnt save any money in the last 6 monthsRarely or never read financial statementsDont believe in taking out insurance to be prepared for the unexpectedCheck only the balance on financial statementsDont have insuranceUsually only pay the minimum amount owing on credit cardsSave only when wanting something big or specialBelieve financial planning is only important for those who have a lot of money Not easily able to keep track of everyday spendingDont think about ways to reduce spendingDont feel comfortable with level of debtBelieve retirement is too far away to think aboutUnderstand only some or none of the information in financial statementsDont saveDont regularly pay the total balance owing on credit cards when dueHave not thought about long-term financial plans for the future and retirementHave problems setting money aside for big purchases or spendingDont regularly do a budget for day-to-day financesWould not consider risk and return when investing40 x 170mm50% Column Width 020406080 0 20 40 60 800 20 40 60 8002040608080% 60% 40% 20% 0% 20% 40% 60% 80%Overall WomenMenHold attitudeOverall Hold attitude46.dealing with money is stressful and overwhelmingEven relatively simple tasks such as paying bills and finding money for unexpected expenses can be stressful at times and if a number of these issues coincide, the experience can become overwhelming. When more complex tasks such as buying a house or making a big investment decision are taken into account, then it is even easier to appreciate why some people believe that dealing with money is stressful and overwhelming.women are much more likely than men to say that dealing with money is stressful and overwhelming (52%/43%). The proportion of women holding this attitude decreases with both age and household income.women who say that money is stressful and overwhelming are more likely than women overall to exhibit 15 of the 20 behaviours that are not indicative of financially literate behaviour, especially one of them. Compared to the other attitudes, holding this attitude has a relatively large impact on behaviour.women who hold this attitude are far more likely than women overall to say they have problems setting money aside for big purchases or spending (39%/28%).For women, this attitude impacts on 15 behaviours: three relating to planning and retirement, three relating to budgeting, three to credit and debt, two to saving, two to information and advice, one to investing and one to protecting money.Differences between genderswomen who hold this attitude are more likely than women overall to say that they do not have insurance. For men, this is not the case.men who hold this attitude are more likely than men overall to say they save only when they want something big or special. For women, this is not the case.47.Financial literacy Women understanding moneyimpact oF attitudeS on behaviour money iS StreSSFuL and overWheLmingTend to fall behind on loan repaymentsDidnt save any money in the last 6 monthsRarely or never read financial statementsDont believe in taking out insurance to be prepared for the unexpectedCheck only the balance on financial statementsDont have insuranceUsually only pay the minimum amount owing on credit cardsSave only when wanting something big or specialBelieve financial planning is only important for those who have a lot of money Not easily able to keep track of everyday spendingDont think about ways to reduce spendingDont feel comfortable with level of debtBelieve retirement is too far away to think aboutUnderstand only some or none of the information in financial statementsDont saveDont regularly pay the total balance owing on credit cards when dueHave not thought about long-term financial plans for the future and retirementHave problems setting money aside for big purchases or spendingDont regularly do a budget for day-to-day financesWould not consider risk and return when investing40 x 170mm50% Column Width 020406080 0 20 40 60 800 20 40 60 8002040608080% 60% 40% 20% 0% 20% 40% 60% 80%Overall WomenMenHold attitudeOverall Hold attitude48.i (do not) spend a lot of time thinking about financial information before i make a financial decisionThis behaviour is at odds with good money management in that it indicates that financial decisions are made without sufficient thought or planning. For most people and in a commonsense way, not spending enough time thinking about financial information before making a decision is not financially literate behaviour.This behaviour is reported by 21% of women, with women and men having roughly the same likelihood of holding this attitude. The proportion of women holding this attitude generally decreases with household income but is not related to age.women who say that they do not spend a lot of time thinking about financial information before making a financial decision are more likely than women overall to exhibit 17 of the 20 behaviours that are not indicative of financially literate behaviour, especially four of them. Compared to the other attitudes, holding this attitude has a relatively large impact on behaviour.women who hold this attitude are far more likely than women overall to not think about ways to reduce their spending (27%/16%), to believe that retirement is too far away to think about (33%/20%), to not have thought about their long-term financial plans for their future and retirement (39%/26%), and to not regularly do a budget (58%/44%).For women, this attitude impacts on all behaviours except one relating to saving, and two relating to credit and debt.Differences between genderswomen who hold this attitude are more likely than women overall to say they usually only pay the minimum amount owing on credit cards, and that they do not regularly pay the total balance owing on their credit card when it is due. For men, this is not the case.49.Financial literacy Women understanding moneyimpact oF attitudeS on behaviour i do not Spend a Lot oF time thinking about FinanciaL inFormation beFore making a deciSionTend to fall behind on loan repaymentsDidnt save any money in the last 6 monthsRarely or never read financial statementsDont believe in taking out insurance to be prepared for the unexpectedCheck only the balance on financial statementsDont have insuranceUsually only pay the minimum amount owing on credit cardsSave only when wanting something big or specialBelieve financial planning is only important for those who have a lot of money Not easily able to keep track of everyday spendingDont think about ways to reduce spendingDont feel comfortable with level of debtBelieve retirement is too far away to think aboutUnderstand only some or none of the information in financial statementsDont saveDont regularly pay the total balance owing on credit cards when dueHave not thought about long-term financial plans for the future and retirementHave problems setting money aside for big purchases or spendingDont regularly do a budget for day-to-day financesWould not consider risk and return when investing40 x 170mm50% Column Width 020406080 0 20 40 60 800 20 40 60 8002040608080% 60% 40% 20% 0% 20% 40% 60% 80%Overall WomenMenHold attitudeOverall Hold attitude50.Financially, i like to live for todayOf all the attitudes, this is probably the one which is most obviously at odds with good money management, the benefits of which increase with sensible, longer-term approaches. For most people, paying no attention to the financial future has serious risks and consequences, and can translate as an aversion to informed financial decision making, including financial planning.women are much less likely than men to say that financially, they like to live for today (29%/34%). The proportion of women holding this attitude generally decreases with age and decreases with household income.women who say that financially they like to live for today are more likely than women overall to exhibit 17 of the 20 behaviours that are not indicative of financially literate behaviour, especially five of them. Compared to the other attitudes, holding this attitude has a relatively large impact on behaviour.women who hold this attitude are far more likely than women overall to say they usually only pay the minimum amount owing on their credit card (24%/14%), to believe that financial planning is only important for those with a lot of money (25%/15%), to believe that retirement is too far away to think about (40%/20%), to not have thought about their long-term financial plans for their future and retirement (40%/26%), and to have problems setting money aside for big purchases or spending (40%/28%).For women, this attitude impacts on all behaviours except one relating to saving, one relating to credit and debt and one relating to budgeting.Differences between genderswomen who hold this attitude are more likely than women overall to say they dont feel comfortable with their level of debt, and that they dont regularly do a budget. For men, this is not the case.men who hold this attitude are more likely than men overall to say they tend to fall behind on their loan repayments. For women, this is not the case.51.Financial literacy Women understanding moneyimpact oF attitudeS on behaviour FinanciaLLy, i Like to Live For todayTend to fall behind on loan repaymentsDidnt save any money in the last 6 monthsRarely or never read financial statementsDont believe in taking out insurance to be prepared for the unexpectedCheck only the balance on financial statementsDont have insuranceUsually only pay the minimum amount owing on credit cardsSave only when wanting something big or specialBelieve financial planning is only important for those who have a lot of money Not easily able to keep track of everyday spendingDont think about ways to reduce spendingDont feel comfortable with level of debtBelieve retirement is too far away to think aboutUnderstand only some or none of the information in financial statementsDont saveDont regularly pay the total balance owing on credit cards when dueHave not thought about long-term financial plans for the future and retirementHave problems setting money aside for big purchases or spendingDont regularly do a budget for day-to-day financesWould not consider risk and return when investing40 x 170mm50% Column Width 020406080 0 20 40 60 800 20 40 60 8002040608080% 60% 40% 20% 0% 20% 40% 60% 80%Overall WomenMenHold attitudeOverall Hold attitude52.i (do not) try to stay informed about money matters and financesPeople will have different definitions of what constitutes trying to stay informed, and what one person considers to be trying, another person may consider to be not trying at all. Furthermore, some people will think they are sufficiently informed while in fact there are gaps in their understanding of money matters and finances. They will not be aware of this fact but will, when asked, respond that they try to stay informed. Nonetheless, most Australian adults recognise that trying to stay informed is the right thing to do.This behaviour is reported by 16% of women, with women and men having roughly the same likelihood of holding this attitude. The proportion of women holding this attitude generally decreases with both age and household income.women who say that they do not try to stay informed about money matters and finances are more likely than women overall to exhibit 18 of the 20 behaviours that are not indicative of financially literate behaviour, especially four of them. Compared to the other attitudes, holding this attitude has the largest impact on behaviour.women who hold this attitude are far more likely than women overall to say they are not easily able to keep track of their everyday spending (26%/16%), to believe that retirement is too far away to think about (36%/20%), to not have thought about their long-term financial plans for their future and retirement (46%/26%), and to not regularly do a budget (57%/44%).For women, this attitude impacts on all behaviours except one relating to saving and one relating to credit and debt.Differences between genderswomen who hold this attitude are more likely than women overall to say they usually only pay the minimum amount owing on their credit cards. For men, this is not the case.53.Financial literacy Women understanding moneyimpact oF attitudeS on behaviour i do not try to Stay inFormedTend to fall behind on loan repaymentsDidnt save any money in the last 6 monthsRarely or never read financial statementsDont believe in taking out insurance to be prepared for the unexpectedCheck only the balance on financial statementsDont have insuranceUsually only pay the minimum amount owing on credit cardsSave only when wanting something big or specialBelieve financial planning is only important for those who have a lot of money Not easily able to keep track of everyday spendingDont think about ways to reduce spendingDont feel comfortable with level of debtBelieve retirement is too far away to think aboutUnderstand only some or none of the information in financial statementsDont saveDont regularly pay the total balance owing on credit cards when dueHave not thought about long-term financial plans for the future and retirementHave problems setting money aside for big purchases or spendingDont regularly do a budget for day-to-day financesWould not consider risk and return when investing40 x 170mm50% Column Width 020406080 0 20 40 60 800 20 40 60 8002040608080% 60% 40% 20% 0% 20% 40% 60% 80%Overall WomenMenHold attitudeOverall Hold attitude54.concLuSionFor issues where overall confidence is high but significant proportions of respondents reported behaviour that could not be said to be financially literate, there may be attitudes at play which impede either awareness of the need to learn, or the progression from awareness to learning and action. For these people, a lack of technical ability does not appear to be the issue so much as the learning and action having a perceived lack of relevance and importance.See the conclusion of chapter 2 for examples where confidence in ability is high, but a significant proportion of respondents reported behaviour that could not be said to be financially literate.For women (and men), the four issues where overall confidence is relatively low, and implicitly, recognition of the importance of learning is relatively high (planning for the financial future, investing, understanding financial language and ensuring enough money for retirement), represent the areas of greatest self-identified need.while recognition of the importance of learning is a positive outcome and an essential prerequisite for taking action, and ultimately increasing levels of confidence and engagement, it does not guarantee that a person will actually engage in the learning process. For these people, a lack of awareness is not the issue, but there may be attitudes at play which prevent the person from actually learning and taking action.For women (and men), there is a range of attitudes that are associated with particular behaviours that could not be said to be financially literate, ie. certain attitudes are likely to have a causal relationship with particular behaviours.These attitudes impact on behaviour to varying degrees.money is not important to be happy in life and money is just a means to buy things have a relatively minor impact on behaviour.These two attitudes often reflect moral or philosophical positions in relation to money. Nothing I do will make a big difference to my financial situation, Dealing with money is boring, and Thinking too much about my long-term financial future makes me feel uncomfortable are likely to have a moderate impact on behaviour.At least half the behaviours tested were more likely to be reported by women holding any of these three attitudes.Dealing with money is stressful and overwhelming, I do not spend a lot of time thinking about financial information before I make a financial decision, Financially, I like to live for today and I do not try to stay informed about money matters and finance have a relatively large impact on behaviour.At least three quarters of the behaviours tested were more likely to be reported by women holding any of these four attitudes.There are some interesting anomalies in the findings, where an attitude impacts on a group of behaviours but does not impact on another behaviour which is very closely linked. For example:Compared to women in general, women who believe that dealing with money is boring are more likely to say that they do not regularly do a budget, that they have problems setting money aside for big purchases or spending, that they dont think about ways to reduce their spending and that they are not able to keep track of their spending. however, despite being more likely to report all of these behaviours, they are not more likely to say that they dont save.Compared to women in general, women who say they do not spend a lot of time thinking about financial information before making a decision are more likely to say they do not pay the total balance owing on their credit card when it is due, and that they usually only pay the minimum amount owing on their credit cards. however, despite being more likely to report these other behaviours, they are not more likely to say that they feel uncomfortable with their level of debt.55.Financial literacy Women understanding moneyThe number of statistically significant matches, at the 95% confidence level, between at least one behaviour under a money topic and an attitude was:planning and retirement associates with nine attitudes; Budgeting associates with seven attitudes; Credit and debt associates with seven attitudes; Information and advice associates with seven attitudes; Saving associates with six attitudes; Investing associates with six attitudes; and protecting money associates with six attitudes. reLationShip betWeen money topic and attitudeplanning and retirementbudgeting credit and debt information and adviceSaving investing protecting moneymoney is not important to be happy in lifemoney is just a means to buy thingsnothing i do will make a big difference to my financial situation dealing with money is boring thinking too much about my long-term financial future makes me feel uncomfortable dealing with money is stressful and overwhelming i do not spend a lot of time thinking about financial information before i make a financial decision Financially, i like to live for today i do not try to stay informed about money matters and finances 56.Overall, the attitudes tested by the survey have the greatest impact on behaviours relating to planning and retirement. with the exception of money is not important to be happy in life, women who hold any of the nine attitudes tested in the survey are more likely to exhibit all three negative behaviours relating to planning and retirement, ie:I have not though about long-term financial plans for my future and my retirement; Retirement is too far away for me to think about; and Financial planning is only important for those who have a lot of money. As noted earlier in this Chapter, planning for the financial future and ensuring enough money for retirement are two of the four issues where women have relatively low levels of overall confidence.57.Financial literacy Women understanding moneyappENdix 1: FINANCIAL LITERACY AUSTRALIANS UNDERSTANDING MONEY Summary OF FiNdiNgSconFidence and the importance oF LearningIn broad terms, self-reported ability decreases with complexity and recognition of the importance of learning increases with complexity, which is both logical and encouraging in terms of awareness of gaps in knowledge and the need to learn.Australians say they have generally high levels of ability with their money, especially when it comes to everyday money management issues, such as budgeting, saving, dealing with credit and managing debt, and are less confident when it comes to more complex money issues that they deal with less frequently, such as investing and planning for retirement.90% of adults say they have the ability to budget88% say they have the ability to save83% say they have the ability to deal with credit cards89% say they can manage debt69% say they have the ability to invest money63% say they can ensure they have enough money for retirement Australians recognise the importance of learning more about the more complex money management issues where their confidence is lacking, such as investing and ensuring enough money for retirement. This is an extremely positive and encouraging result, and is consistent with the finding that many adults intend, in the next 12 months, to make improvements in the way they manage their money. Australians are less interested in learning about everyday money management issues, consistent with their higher levels of confidence in these areas.70% of adults are interested in learning more about how to invest money71% are interested in learning more about ensuring enough money for retirement77% are interested in learning more about planning for their long-term future74% are interested in learning more about understanding their rights and responsibilities57% are interested in learning more about budgeting49% are interested in learning more about dealing with credit cards Overall, Australians have generally high levels of confidence in their ability, and in most cases people say they manage their money well. however, some people do not have good money management habits, particularly in areas where they are less confident, such as investing, but also in areas where recognition of the importance of learning is relatively low, such as budgeting, saving, dealing with credit cards and managing debt.The report highlights areas where there is a divergence between what people believe to be a good money habit and what they do in practice. For instance, respondents had moderately high levels of confidence in their ability to recognise a scam, yet around two thirds would not consider both risk and return when making an investment decision.58.attitudeS and beLieFSThe report highlights some of the negative views that may hold people back from achieving their goals. Respondents were asked to assess their level of agreement with ten attitudes towards money that can contribute to poor financial outcomes.The findings are significant, with at least 55% of the adult population having one or more attitudes, beliefs or behaviours that can stop them engaging with money.Commonly held attitudes and beliefs regarding money - from thinking it doesnt matter or isnt important, to finding it stressful, boring or too hard - may adversely affect financial literacy, regardless of whether people are confident in their ability to manage money, ie. ability does not necessarily translate into practice.what people think and feel about money issues impacts upon how receptive they are to learning about money. Overcoming and managing these attitudes is an important part of improving peoples ability and willingness to engage with their money.55% of adults believe that money is just a means to buy things48% say that dealing with money is stressful and overwhelming40% say that thinking about their long-term financial future makes them uncomfortable36% say money is not important to be happy in life31% say financially, they like to live for today31% say dealing with money is boringintentionSmany Australians intend to make improvements to the way they manage their money but some dont, mainly because theyre happy with their current arrangements.40% of adults intend to make improvements in the way they manage their money in the next 12 months16% dont intend to make improvements in the way they manage their money in the next 12 months, either because they are happy with their current arrangements (81%), they are not interested (9%) or they havent thought about it (7%)SeLF-eFFicacyA persons beliefs about their own capability to achieve outcomes are reflected by their self-efficacy. Developing self-efficacy is an effective way to overcome many of the attitudinal barriers to managing money better.The lesson from self-efficacy may be that the best program for financial literacy is one that gets people started as soon as possible with an achievable goal, while being enough of a challenge to build confidence. Self-efficacy gains can then be achieved from the experience of having accomplished the goal.If each goal helps to build a strong foundation in both understanding money and engaging with money matters, then a person should be able to embark upon a process whereby each success reinforces behaviour and provides additional motivation for the next step.59.Financial literacy Women understanding moneyyoung peopLe and moneyyoung people are less confident than adults when it comes to managing money, reflecting their relative lack of experience. however, theyre reasonably well informed about good money habits, even if they dont always put them into practice, and theyre keen to learn more.72% of young people say that saving a small amount regularly from a young age is the best way to save money, but only 50% of youth say that they save regularly61% would not consider return and 77% would not consider risk when choosing an investment44% say they have the ability to deal with credit cards, compared to 83% of adults67% agree that retirement is too far away to think about, compared to 21% of adults48% spend a lot of time thinking about financial information before making a financial decision, compared to 73% of adults59% say that financially, they like to live for today, compared to 31% of adults70% to 90% want to learn more about money issuestopicSbudgetingAustralians are highly confident in their ability to budget, but for many people its an informal affair and around half the adult population say they dont budget regularly.90% of adults say they have the ability to budget48% say they do not budget regularly for their day-to-day finances27% say they have difficulty setting money aside for big purchases or spending17% say they could not get by for some time in case of a financial emergencySavingAustralians are highly confident in their ability to save and the majority of people say they have good savings habits, but a fifth of adults say they dont save.88% of adults say they have the ability to save62% say that they save regularly43% say they spend first and save second22% say they dont saveinvestingCompared to budgeting and saving, fewer Australians are confident in their ability to invest and the findings indicate that many wouldnt take key considerations into account before making an investment decision, but theyre interested in learning more.69% of adults say they have the ability to invest money70% are interested in learning more about investing money18% say they have an investment property and 46% say they have other investments66% would not consider both risk and return when choosing an investment 60.credit and debtAustralians are highly confident in their ability to deal with credit cards and manage debt. most people say they manage debt wisely, but some say they make only minimum repayments and others say they get into debt by buying things they cant afford.89% of adults say they can manage debt and 83% feel confident with credit cards76% say that they regularly pay the total balance owing on their credit card when it is due17% usually only make the minimum repayment on loans and 13% do the same with credit cards21% say that they will use debt to buy things they cant affordplanning and retirementAustralians are highly confident in their ability to plan for their long-term financial future. Fewer are confident in their ability to ensure enough money for retirement, but theyre interested in learning more about how their money can give them the choice and flexibility theyre looking for.81% of adults say they have the ability to plan for their long-term future63% say they have the ability to ensure enough money for retirement86% do not believe that the age pension will be sufficient for retirement, and 73% say employer funded superannuation will not meet their retirement needs77% are interested in learning more about planning for their long-term futureprotecting moneyAustralians are highly confident in their ability to protect their money, including choosing appropriate insurance, understanding rights and responsibilities when dealing with money and recognising a scam or an investment scheme that seems too good to be true. however, fewer are confident in their ability to invest and the findings indicate that many wouldnt take key considerations into account when making an investment decision, so they may be more vulnerable to scams than they think.82% of adults say they have the ability to choose appropriate insurance85% say they understand their rights and responsibilities when dealing with money88% say they can recognise a scam or an investment scheme that seems too good to be true69% say they have the ability to invest money66% would not consider both risk and return when choosing an investmentinformation and adviceAustralians are highly confident in their ability to get information about money and around two thirds say they have sought financial advice, usually about a tax or investment issue. Fewer are confident in their ability to understand financial language, and this is consistent with them saying theyre less confident in their ability to invest and ensure enough money for retirement, but theyre interested in learning more.85% of adults say they have the ability to get information about money81% say they have the ability to deal with financial services providers68% say they have used an accountant/tax agent64% say they understand financial language and 68% are interested in learning more20% say they understand some or none of the information in financial statements61.Financial literacy Women understanding moneyappENdix 2: FiNdiNgS13, 14Women - age Women - household income (thousands)total men Women 18-29 30-44 45-54 55-64 >64 $100attitudeS, beLieFS and barrierSDealing with money is stressful and overwhelmingTotal agree 47.7% 42.9% 52.3% 60.5% 55.0% 51.4% 45.3% 37.2% 57.2% 56.2% 54.1% 45.7%Thinking too much about my long-term financial future makes me feel uncomfortableTotal agree 39.5% 37.4% 41.7% 45.1% 44.1% 43.9% 36.1% 30.0% 45.8% 42.0% 41.1% 32.3%Total disagree 53.6% 56.1% 51.1% 44.5% 48.9% 51.7% 58.2% 62.1% 44.5% 51.1% 52.5% 62.8%Dealing with money is boringTotal agree 31.4% 28.9% 33.8% 32.4% 33.5% 38.2% 31.3% 33.2% 37.0% 30.5% 32.2% 35.4%money is just a means to buy thingsTotal agree 55.1% 58.5% 51.7% 52.9% 51.8% 52.4% 49.5% 50.2% 57.0% 56.1% 49.3% 48.1%money is important to be happy in lifeTotal disagree 36.3% 35.0% 37.6% 34.3% 37.6% 36.9% 41.7% 40.4% 46.3% 42.0% 36.7% 32.3%Financially, I like to live for todayTotal agree 31.3% 34.1% 28.6% 40.5% 25.7% 25.9% 21.8% 25.6% 33.4% 28.4% 26.2% 22.5%I spend a lot of time thinking about financial information before I make a (financial) decisionTotal disagree 22.0% 22.6% 21.3% 23.1% 17.8% 21.1% 21.0% 29.0% 26.1% 21.4% 17.6% 19.9%I try to stay informed about money matters and financesTotal disagree 15.4% 15.0% 15.8% 21.1% 16.1% 12.7% 13.0% 12.4% 15.4% 15.7% 14.6% 14.4%Nothing I do will make a big difference to my financial situationTotal agree 20.8% 18.7% 22.8% 13.0% 15.2% 21.3% 35.7% 53.6% 49.0% 29.6% 17.3% 8.3%budgetingI have the ability and understanding to budget day-to-day financesTotal agree 90.4% 89.5% 91.4% 86.0% 92.2% 92.8% 92.9% 95.9% 88.5% 91.0% 92.3% 92.8%At this point in your life, is it important for you to learn more about how to budget day-to-day finances?yes 57.3% 57.1% 57.4% 78.6% 57.5% 49.3% 47.0% 39.7% 59.8% 61.5% 61.1% 52.1%I am easily able to keep track of my everyday spendingTotal agree 81.8% 81.9% 81.8% 71.1% 79.9% 86.1% 87.6% 95.0% 82.6% 83.5% 81.0% 82.6%13 where the difference in responses between the genders was statistically significant at the 95% confidence level, the response percentages have been bolded.14 please note that around one sixth of respondents did not indicate their household income. This group has not been included in the household income section of the tabulated data.62.Women - age Women - household income (thousands)total men Women 18-29 30-44 45-54 55-64 >64 $100I think about ways to reduce my spendingTotal agree 79.1% 77.7% 80.4% 85.2% 86.0% 77.8% 72.6% 67.4% 75.9% 81.8% 82.7% 79.8%I have problems with setting money aside for big purchases or spendingTotal agree 26.7% 25.8% 27.6% 31.0% 28.5% 28.2% 25.6% 19.6% 37.6% 30.3% 26.1% 18.0%Total disagree 69.5% 70.1% 68.9% 64.9% 68.1% 68.5% 71.8% 77.1% 59.9% 66.6% 70.1% 79.8%I could get by for some time in case of a financial emergency (such as an illness, divorce)Total agree 79.4% 81.8% 77.0% 70.0% 76.0% 78.9% 81.8% 86.0% 67.7% 72.6% 77.8% 89.4%Total disagree 16.8% 15.0% 18.6% 24.1% 19.9% 17.1% 15.6% 9.8% 25.6% 23.1% 18.1% 8.6%I regularly do a budget for my day-to-day financesTotal agree 48.1% 43.5% 52.6% 51.8% 54.3% 51.2% 52.1% 51.7% 62.5% 55.9% 52.0% 47.0%Total disagree 47.6% 51.8% 43.5% 43.6% 41.9% 43.9% 44.6% 46.1% 34.1% 41.6% 43.9% 47.3%SavingDo you have a savings account? (just for savings)yes 72.1% 71.4% 72.8% 80.0% 70.8% 73.1% 71.4% 65.0% 74.2% 69.4% 75.3% 72.7%I have the ability and understanding to save moneyTotal agree 88.3% 88.2% 88.4% 84.9% 89.7% 87.4% 88.9% 92.8% 81.9% 85.6% 89.6% 92.8%At this point in your life, is it important for you to learn more about how to save money?yes 65.3% 64.1% 66.4% 85.3% 68.2% 60.1% 58.2% 41.9% 61.0% 68.3% 71.6% 61.1%Thinking about savings, which of the following statements best applies to you?Save regularly 62.4% 63.1% 61.7% 60.1% 61.6% 62.9% 67.9% 55.5% 52.1% 53.9% 65.0% 73.1%Dont save 21.5% 21.0% 22.2% 19.0% 22.0% 23.9% 19.2% 29.5% 33.2% 28.2% 18.8% 13.4%which of the following best describes how you saved money in the last 6 months?Saved first, spent after49.9% 47.9% 51.8% 51.4% 52.4% 53.4% 52.0% 47.0% 40.0% 46.7% 51.7% 54.8%Spent first, saved leftovers43.0% 44.3% 41.8% 43.6% 40.6% 40.8% 39.2% 46.9% 50.9% 46.4% 40.6% 40.4%which of the following, do you think, would provide you with the most money? would it be...Saving a small amount regularly, starting young74.7% 74.1% 75.3% 70.4% 78.0% 74.1% 80.5% 73.3% 74.6% 78.4% 78.2% 73.1%inveStingDo you own or are you currently paying off the home you live in?yes 62.0% 60.2% 63.9% 25.6% 69.9% 77.8% 80.5% 81.6% 63.2% 66.6% 72.4% 75.3%Do you own or are you currently paying off investment property?yes 18.1% 20.0% 16.1% 4.9% 19.0% 26.2% 18.9% 9.5% 7.0% 10.1% 20.8% 31.0%Do you have investments? (such as shares, bonds, managed funds, debentures, unit trusts)yes 46.1% 49.2% 42.9% 18.6% 44.1% 51.1% 57.0% 59.3% 28.3% 37.7% 45.3% 61.5%63.Financial literacy Women understanding moneyWomen - age Women - household income (thousands)total men Women 18-29 30-44 45-54 55-64 >64 $100I have the ability and understanding to invest moneyTotal agree 68.8% 74.8% 62.8% 51.6% 63.6% 70.6% 66.7% 65.8% 50.6% 63.5% 63.2% 72.4%At this point in your life, is it important for you to learn more about how to invest money?yes 69.7% 71.1% 68.4% 80.5% 73.7% 69.3% 56.8% 39.0% 44.6% 63.8% 77.1% 75.8%The risks or returns of an investment are unpredictableTotal agree 65.3% 63.3% 67.2% 61.0% 66.2% 70.6% 70.7% 74.9% 71.7% 72.7% 70.8% 59.1%Imagine you had some money to invest. what would you consider in choosing an investment?Risk 49.3% 51.7% 46.9% 47.8% 49.7% 43.8% 45.9% 43.1% 43.6% 46.5% 47.9% 51.5%Return 55.2% 58.5% 52.0% 56.2% 57.4% 52.8% 44.6% 34.6% 38.0% 49.9% 58.4% 59.3%Risk and Return 34.1% 38.0% 30.3% 32.8% 34.9% 28.1% 26.5% 20.1% 20.9% 27.2% 33.9% 35.7%Type of investment 30.1% 30.9% 29.4% 23.5% 28.5% 36.5% 32.4% 28.4% 26.7% 26.1% 29.9% 30.3%Diversity/spread of investments4.7% 4.5% 4.8% 1.6% 4.5% 5.7% 7.0% 8.0% 5.0% 3.5% 4.7% 5.7%Background information5.8% 6.1% 5.4% 7.0% 4.6% 4.7% 5.7% 5.1% 1.1% 4.2% 6.9% 4.7%credit and debtDo you have loans? (including mortgage, car loans, investment loans, line of credit etc.)yes 56.1% 57.1% 55.0% 45.3% 75.9% 68.0% 37.7% 10.3% 31.9% 47.6% 72.7% 76.9%Do you have a credit card?yes 72.1% 73.2% 70.9% 51.6% 79.9% 77.6% 75.5% 67.2% 47.0% 71.5% 77.4% 84.6%Do you have other debts? (such as school fees, hire purchase, heCS etc.)yes 22.0% 20.7% 23.2% 39.0% 29.4% 18.5% 4.1% 2.7% 15.6% 22.5% 26.2% 25.1%I have the ability and understanding to manage debtTotal agree 88.9% 89.9% 87.9% 78.0% 89.8% 92.5% 92.1% 89.7% 81.3% 90.0% 89.8% 93.3%At this point in your life, is it important for you to learn more about how to manage debt?yes 61.0% 61.2% 60.7% 80.2% 64.1% 53.6% 47.2% 38.3% 57.5% 63.5% 66.3% 57.2%I have the ability and understanding to deal with credit cardsTotal agree 83.1% 83.7% 82.5% 68.4% 88.1% 88.0% 85.6% 82.1% 65.8% 80.9% 87.0% 90.7%At this point in your life, is it important for you to learn more about how to deal with credit cards?yes 49.3% 49.3% 49.3% 68.2% 48.6% 43.7% 40.4% 32.4% 44.2% 51.8% 53.7% 44.3%There is no better way of saving money than paying off debt earlyTotal agree 84.9% 83.4% 86.2% 85.6% 87.0% 82.7% 86.6% 91.2% 84.0% 89.4% 89.0% 82.6%I will not get into debt; if I cant afford it I wont buy itTotal agree 75.5% 75.2% 75.8% 69.8% 70.8% 74.5% 86.7% 92.8% 82.1% 79.9% 72.0% 69.3%Total disagree 21.4% 21.6% 21.2% 26.2% 26.1% 21.9% 12.3% 5.3% 13.7% 17.8% 24.7% 27.9%64.Women - age Women - household income (thousands)total men Women 18-29 30-44 45-54 55-64 >64 $100I feel comfortable with my level of debtTotal agree 78.8% 80.5% 77.2% 73.5% 73.8% 78.1% 83.2% 86.2% 70.2% 74.9% 75.0% 82.4%Total disagree 16.8% 15.4% 18.2% 21.6% 22.6% 18.9% 11.2% 5.4% 22.2% 19.9% 20.3% 15.0%I regularly pay the total balance owing on my credit card when it is dueTotal agree 76.2% 78.5% 73.9% 69.6% 69.8% 75.0% 79.7% 85.9% 70.9% 70.8% 70.8% 80.2%Total disagree 20.4% 17.6% 23.3% 27.2% 27.5% 22.8% 17.7% 10.5% 21.7% 25.6% 26.3% 18.0%I usually only pay the minimum amount owing on my credit cardTotal agree 13.2% 13.0% 13.5% 18.3% 15.8% 11.3% 8.6% 8.3% 16.7% 14.9% 14.3% 11.6%Total disagree 83.7% 83.5% 83.9% 79.0% 81.7% 86.5% 88.9% 87.9% 79.3% 80.0% 84.2% 87.2%And thinking about your loans, which of the following best describes your situation? I usually pay minimum amount required17.1% 16.1% 18.2% 23.1% 15.4% 18.0% 23.8% 11.4% 22.7% 20.8% 16.5% 15.5%pay more than minimum80.4% 81.2% 79.7% 75.6% 83.1% 79.7% 71.9% 77.5% 68.9% 76.5% 82.1% 82.9%pLanning and retirementDo you have a superannuation fund?yes 80.9% 83.6% 78.3% 84.8% 88.5% 83.4% 72.7% 31.6% 38.5% 67.3% 91.3% 95.6%Financial planning is only important for those who have a lot of moneyTotal disagree 81.7% 80.6% 82.8% 85.5% 84.2% 84.0% 83.3% 70.4% 68.1% 80.6% 85.3% 93.5%I have the ability and understanding to plan for my long-term financial futureTotal agree 80.6% 83.8% 77.4% 69.6% 78.2% 80.8% 82.4% 79.4% 66.6% 73.2% 81.1% 86.0%At this point in your life, is it important for you to learn more about how to plan for your long-term financial future?yes 77.4% 76.6% 78.3% 90.3% 85.0% 79.2% 67.3% 43.8% 63.5% 76.5% 85.8% 80.5%I have the ability and understanding to ensure enough money for my retirementTotal agree 62.6% 65.1% 60.1% 57.9% 69.3% 73.7% 74.8% 76.7% 50.5% 59.6% 73.2% 77.6%At this point in your life, is it important for you to learn more about how to ensure enough money for your retirement?yes 70.6% 69.5% 71.7% 83.4% 85.7% 81.4% 74.0% 57.0% 73.2% 81.5% 86.8% 79.2%Age pension will be sufficient for meTotal agree 9.4% 10.0% 8.8% 4.0% 4.8% 8.5% 12.4% 27.1% 28.2% 10.7% 5.1% 3.2%Total disagree 85.5% 84.6% 86.3% 89.3% 92.1% 87.9% 82.1% 64.8% 65.8% 82.9% 91.9% 94.9%Retirement is too far away for me to think about itTotal agree 20.7% 21.2% 20.3% 43.0% 22.5% 10.5% 7.9% 6.0% 31.6% 24.9% 20.4% 15.0%Total disagree 63.6% 63.4% 63.8% 53.2% 73.8% 86.9% 88.9% 86.1% 65.1% 70.5% 76.7% 82.2%employer funded superannuation will be enough to cover my retirement needsTotal agree 14.2% 16.1% 12.3% 12.1% 9.2% 12.2% 13.4% 21.4% 13.8% 12.8% 11.8% 12.3%Total disagree 73.2% 73.1% 73.4% 75.7% 83.1% 78.8% 66.9% 37.0% 50.5% 69.5% 80.9% 83.0%65.Financial literacy Women understanding moneyWomen - age Women - household income (thousands)total men Women 18-29 30-44 45-54 55-64 >64 $100In your opinion when is the best time for a person to start planning for their financial future? would it bewhen starting work 46.5% 41.6% 51.4% 45.6% 50.8% 54.0% 56.2% 54.7% 56.8% 49.2% 51.3% 53.7%During school days 19.9% 20.4% 19.5% 15.0% 20.9% 20.4% 21.6% 20.5% 23.1% 20.6% 18.4% 17.0%have you personally thought about long-term financial plans for the future and your retirement?yes 75.6% 77.6% 73.6% 59.6% 78.8% 83.4% 79.3% 63.1% 54.8% 70.7% 80.3% 85.7%No 23.8% 21.8% 25.8% 40.2% 20.9% 16.4% 19.9% 34.0% 43.1% 28.3% 19.3% 14.3%Thinking about your long-term plans, what were the reasons you started to make these?enough for retirement/early retirement39.5% 41.1% 37.8% 29.1% 35.9% 42.5% 41.3% 46.4% 20.1% 36.6% 39.7% 39.9%To do what I want 19.9% 20.5% 19.2% 21.6% 17.2% 19.4% 21.0% 18.2% 16.1% 19.3% 19.9% 21.9%Age pension insufficient13.5% 12.6% 14.5% 12.8% 16.1% 15.0% 14.4% 10.8% 11.9% 12.8% 16.2% 15.3%protecting moneyDo you have insurance? (ie home and contents insurance, car insurance, life insurance etc.)yes 85.9% 85.2% 86.5% 73.6% 91.7% 92.0% 90.1% 84.3% 80.3% 85.9% 92.8% 95.3%I have the ability and understanding to choose appropriate insuranceTotal agree 81.7% 82.0% 81.4% 71.0% 85.6% 83.6% 84.2% 83.5% 77.5% 84.5% 83.6% 84.6%At this point in your life, is it important for you to learn more about how to choose appropriate insurance?yes 64.2% 63.4% 65.0% 79.9% 65.5% 60.3% 56.2% 50.8% 60.7% 68.7% 68.5% 62.5%I believe in taking out insurance to be prepared for the unexpectedTotal agree 81.1% 78.7% 83.5% 82.8% 88.4% 85.0% 79.5% 74.5% 75.9% 83.1% 89.5% 90.8%I have the ability to understand my rights and responsibilities when dealing with moneyTotal agree 85.4% 85.8% 84.9% 76.4% 84.8% 88.4% 89.4% 91.5% 84.6% 84.9% 84.9% 87.6%At this point in your life, is it important for you to learn more about your rights and responsibilities when dealing with money?yes 73.7% 73.2% 74.2% 85.8% 75.2% 70.1% 67.1% 63.0% 72.6% 75.5% 76.7% 68.9%I have the ability and understanding to recognise a scam or investment scheme that seems to good to be trueTotal agree 87.8% 88.8% 86.7% 77.9% 88.7% 90.2% 89.9% 89.7% 82.0% 87.2% 86.9% 91.4%At this point in your life, is it important for you to learn more about how to recognise a scam or investment scheme that seems to good to be true?yes 68.5% 68.5% 68.4% 77.9% 65.3% 67.5% 67.3% 61.0% 66.1% 72.9% 70.7% 61.5%inFormation and adviceI have the ability and understanding to get information about moneyTotal agree 84.5% 84.9% 84.2% 81.2% 85.3% 86.5% 84.8% 82.2% 72.5% 82.7% 85.9% 90.3%At this point in your life, is it important for you to learn more about how to get information about money?yes 67.8% 66.9% 68.7% 82.1% 69.8% 67.0% 62.1% 48.5% 60.7% 69.3% 73.3% 66.3%66.Women - age Women - household income (thousands)total men Women 18-29 30-44 45-54 55-64 >64 $100I have the ability and understanding to deal with banks or other financial services providersTotal agree 81.2% 81.9% 80.5% 73.8% 83.4% 82.3% 80.8% 82.3% 77.5% 75.9% 83.3% 86.0%At this point in your life, is it important for you to learn more about how to deal with banks or other financial services providers?yes 66.1% 65.2% 67.0% 80.3% 66.2% 64.6% 62.4% 51.1% 60.7% 68.8% 70.0% 63.9%I have the ability to understand financial languageTotal agree 63.8% 67.8% 59.8% 50.8% 61.9% 65.3% 61.7% 60.0% 53.2% 55.5% 60.0% 70.1%Total disagree 27.8% 23.7% 31.9% 39.1% 29.8% 27.3% 30.9% 32.2% 35.5% 35.1% 32.3% 23.7%At this point in your life, is it important for you to learn more about how to understand financial language?yes 68.3% 66.3% 70.2% 81.1% 73.3% 69.6% 64.0% 46.5% 58.7% 68.0% 76.8% 68.5%I spend a lot of time thinking about financial information before I make a (financial) decisionTotal agree 72.9% 71.6% 74.1% 70.6% 77.9% 74.7% 75.2% 67.4% 66.2% 74.0% 77.6% 76.4%Thinking about your situation, for financial information or advice would you consider usingFamily 63.0% 62.6% 63.3% 85.5% 68.6% 51.2% 46.9% 42.5% 63.1% 58.3% 64.7% 64.8%Friends 55.0% 57.1% 52.9% 68.1% 60.3% 44.7% 38.4% 30.5% 45.1% 46.8% 53.5% 54.2%Newspapers 47.3% 50.2% 44.4% 48.3% 46.5% 45.0% 41.2% 32.7% 34.1% 38.8% 46.6% 50.3%Business/money magazines47.5% 51.4% 43.6% 48.3% 49.2% 46.1% 34.9% 23.3% 30.3% 33.0% 46.4% 57.9%Community services 42.1% 36.4% 47.9% 55.7% 50.0% 45.8% 44.5% 32.7% 59.3% 53.5% 49.0% 33.8%Tv or radio 31.0% 31.5% 30.4% 35.0% 31.7% 30.2% 26.5% 21.9% 30.6% 26.7% 35.3% 30.1%Seminars/ educational institutions52.1% 53.7% 50.6% 52.5% 49.5% 53.7% 55.2% 38.4% 42.5% 48.8% 53.9% 52.9%work 36.8% 41.3% 32.4% 66.7% 52.1% 41.5% 36.0% 17.7% 49.4% 44.2% 49.3% 52.9%Accountant/tax agent 81.2% 81.3% 81.1% 82.6% 88.4% 78.6% 76.0% 66.8% 70.4% 80.5% 84.8% 88.6%Financial adviser 82.0% 79.5% 84.4% 86.7% 88.0% 83.9% 82.6% 72.1% 75.3% 85.7% 89.6% 88.2%Bank 60.2% 55.1% 65.2% 79.1% 65.1% 61.3% 55.5% 55.1% 69.0% 66.1% 68.2% 60.3%Internet websites 48.1% 49.5% 46.7% 63.4% 54.9% 43.5% 27.8% 15.1% 30.4% 39.8% 49.6% 57.4%Government websites 49.4% 48.6% 50.2% 62.4% 58.1% 51.2% 34.0% 18.3% 39.4% 43.9% 56.8% 56.7%Centrelink 29.0% 25.2% 32.7% 35.6% 28.3% 23.6% 35.8% 52.9% 50.4% 39.3% 27.5% 16.6%have you ever used an accountant/tax agent for financial information or advice?yes 67.9% 69.3% 66.4% 49.2% 74.1% 74.3% 70.0% 61.5% 50.7% 65.5% 70.7% 77.9%have you ever used a financial adviser for financial information or advice?yes 54.4% 55.2% 53.6% 28.1% 56.4% 63.1% 68.4% 63.8% 45.3% 52.9% 56.4% 63.6%have you ever used a bank for financial information or advice?yes 56.5% 53.0% 60.0% 55.7% 60.8% 64.7% 60.5% 57.5% 66.2% 58.2% 64.3% 62.9%67.Financial literacy Women understanding moneyWomen - age Women - household income (thousands)total men Women 18-29 30-44 45-54 55-64 >64 $100what were your reasons for consulting the accountant/tax agent, bank or financial adviser?Tax advice 28.2% 34.2% 22.2% 24.8% 26.5% 22.3% 12.1% 12.0% 13.7% 23.8% 22.9% 25.0%Investment advice 26.5% 28.7% 24.2% 16.9% 24.7% 33.6% 21.3% 32.0% 20.9% 23.1% 23.5% 33.7%how often do you read financial paper statements that you receive from banks or financial service providers?Read every time 62.9% 61.8% 64.0% 51.6% 63.5% 68.2% 70.1% 76.5% 67.7% 64.4% 62.2% 62.4%Regularly 93.1% 92.7% 93.5% 91.1% 93.8% 95.2% 93.8% 94.3% 93.2% 94.2% 93.5% 93.6%To what extent would you say you understand the information provided in financial statements? All or most of it 79.3% 79.9% 78.7% 72.1% 81.1% 83.1% 77.8% 78.8% 72.6% 73.8% 80.8% 84.3%Some of it 18.9% 18.6% 19.2% 25.0% 17.7% 15.3% 18.9% 18.2% 24.2% 23.9% 17.6% 15.0%68.impact oF attitudeS on behaviour15total attitudemoney is (not) important to be happy in lifemoney is just a means to buy thingsnothing i do will make a big difference to my financial situationdealing with money is boringthinking too much about my long-term financial future makes me feel uncomfortabledealing with money is stressful and overwhelmingi (do not) spend a lot of time thinking about financial information before making a financial decisionFinancially, i like to live for todayi (do not) try to stay informed about money matters and financesI tend to fall behind on loan repaymentswomen 0.8% 2.8%men 1.1% 2.7%I did not save any money in the last six monthswomen 4.9% 6.5%men 6.0% 8.8%I rarely or never read financial statementswomen 6.0% 7.7% 10.4% 8.8% 13.0%men 6.9% 9.2% 9.1% 11.8% 10.2% 13.8%I do not believe in taking out insurance to be prepared for the unexpectedwomen 11.4% 16.3% 20.0% 13.8% 18.7%men 16.8% 22.8% 26.6% 21.3% 30.4%I check only the balance on financial statementswomen 12.0% 16.6% 15.0% 14.7% 20.1% 16.5% 21.3%men 13.0% 17.7% 18.0% 17.4% 18.1% 18.0% 23.2%I do not have insurancewomen 13.4% 16.2% 15.5% 18.3% 17.9% 20.4%men 14.7% 21.7% 22.2% 24.0%I usually only pay the minimum amount owing on credit cardswomen 13.5% 19.2% 17.0% 18.9% 19.8% 18.8% 24.2% 20.0%men 13.0% 18.5% 19.2% 18.4% 21.2%I save only when I want something big or specialwomen 14.8% 19.5% 21.7% 19.3%men 14.3% 18.2% 17.0% 17.6% 19.0% 22.2% 21.5%I believe that financial planning is only important for those who have a lot of moneywomen 14.8% 18.1% 33.6% 19.9% 21.3% 19.1% 21.1% 25.2% 23.9%men 16.6% 21.1% 38.6% 25.1% 23.5% 22.3% 22.6% 26.1% 27.3%I am not easily able to keep track of my everyday spendingwomen 15.7% 20.2% 22.4% 21.8% 25.3% 24.6% 26.0%men 15.2% 20.6% 19.4% 20.5% 24.0% 19.2% 25.8%15 Consistent with the Attitudes Section in Chapter 3, this table shows values only where those who hold a particular attitude are statistically significantly more likely (at the 95% confidence level) to exhibit a particular behaviour than those who do not hold the attitude.69.Financial literacy Women understanding moneytotal attitudemoney is (not) important to be happy in lifemoney is just a means to buy thingsnothing i do will make a big difference to my financial situationdealing with money is boringthinking too much about my long-term financial future makes me feel uncomfortabledealing with money is stressful and overwhelmingi (do not) spend a lot of time thinking about financial information before making a financial decisionFinancially, i like to live for todayi (do not) try to stay informed about money matters and financesI do not think about ways to reduce my spendingwomen 16.0% 21.9% 19.3% 20.9% 27.1% 24.7%men 18.3% 24.4% 21.2% 30.8% 26.9%I do not feel comfortable with my level of debtwomen 18.2% 24.8% 25.1% 24.0% 25.1%men 15.4% 18.8% 22.3% 22.1% 21.6%I believe that retirement is too far away to think aboutwomen 20.3% 24.6% 26.8% 29.5% 26.7% 30.9% 27.5% 32.6% 40.2% 35.5%men 21.2% 27.6% 35.5% 30.0% 31.9% 29.0% 32.8% 37.2% 38.8%I understand only some or none of the information in financial statementswomen 21.0% 25.8% 25.1% 25.4% 26.0% 24.6% 26.7% 30.1%men 19.8% 24.2% 26.8% 27.4% 26.1% 26.5% 33.2%I do not savewomen 22.2% 36.4% 31.1% 29.0% 27.4% 31.0% 30.7%men 21.0% 32.5% 25.7% 28.3% 27.2% 28.5% 28.0% 27.5%I do not regularly pay the total balance owing on my credit card when it is duewomen 23.3% 28.0% 29.3% 31.6% 30.6% 28.2%men 17.6% 21.4% 21.6% 24.7% 24.8%I have not thought about long-term financial plans for the future and my retirementwomen 25.8% 29.5% 37.6% 29.6% 32.6% 30.1% 39.0% 39.7% 45.6%men 21.8% 25.3% 33.1% 27.8% 27.7% 25.2% 37.4% 32.3% 42.7%I have problems setting money aside for big purchases or spendingwomen 27.6% 36.4% 33.4% 41.3% 39.2% 31.9% 40.4% 35.9%men 25.8% 38.9% 33.5% 39.2% 39.2% 29.8% 37.6% 32.7%I do not regularly do a budget for day-to-day financeswomen 43.5% 51.5% 57.7% 47.3% 57.3%men 51.8% 57.5% 66.2% 66.7%I would not consider risk and return when making an investment decisionwomen 69.7% 77.8% 73.8% 72.5% 76.0% 77.5% 76.8%men 62.0% 73.4% 65.8% 66.6% 70.6% 69.2% 70.2%70.appENdix 3: SurvEy mEThOdOLOgyovervieWThe survey for the Financial Literacy Australians understanding money report was conducted to gain a greater understanding of the attitudes and behaviour of Australians about money. It was commissioned by the Financial literacy Foundation and conducted by DBm Consultants. This appendix reproduces in large part the methodology appendix contained in the earlier report.The survey was the largest Australian study of its kind, covering 7,500 people aged 12 to 75. The present report has analysed the survey results for the 6,947 people aged 18 to 75, which comprised 4,138 women and 2,809 men. For the data analysis, the final sample was weighted to reflect known population characteristics. weighting was applied by age, state and gender. The population data was derived from the Australian Bureau of Statistics (ABS) census data.The survey is of respondents self assessment of financial understanding and behaviour. It does not aim to provide an objective measure of competency in financial matters, but complements other studies that do so.For the purposes of the survey, financial literacy is defined as the ability to make informed judgements and to take effective decisions regarding the use and management of money1.16 most countries use the term financial literacy though some, for example the united Kingdom, use financial capability. 17 This report treats the two terms as interchangeable.18reSearch methodoLogyThe research methodology for this national study of financial literacy attitudes and behaviour involved five stages: exploratory research, sampling, development work, data collection and data analysis.exploratory researchA literature review was done to identify existing research in this field. The review included published results from previous studies on financial literacy and related topics from various national initiatives in Australia, Ireland, Singapore, the united Kingdom and the united States.The review identified relevant definitions, concepts and issues for consideration in the present study.Definitions of financial literacy were reasonably comparable within Australia, but there is no standard definition that could be applied simply across different communities or countries.Concepts relating to financial literacy are generally tailored to meet the national focus or specific purpose of measuring financial literacy in any given country.16 Schagen and lines, op. cit., p. ii.17 Financial capability is a broad concept, encompassing peoples knowledge and skills to understand their own financial circumstances, along with the motivation to take action. Financially capable consumers plan ahead, find and use information, know when to seek advice and can understand and act on this advice, leading to greater participation in the financial services market. hm Treasury, Financial Capability: the Governments long-term approach, london, united Kingdom, January 2007, p. 19.18 In practice, both cover decision-making, practical skills and behaviour as well as knowledge and understanding. Financial education aims at the same ultimate goal whether that is defined by improving financial literacy or capability. A OConnell, Measuring the Effectiveness of Financial Education, paper prepared for the Retirement Commission, wellington, New Zealand, April 2007, p. 2.71.Financial literacy Women understanding moneymeasures of financial literacy are also given a different emphasis according to the notions of knowledge and/or behaviour traits that are pertinent to the particular study.measures of financial literacy need to address different levels of sophistication in daily money management, debt, insurance, investments including risk and return, and financial planning.Significant differences were expected by age, education and life values with regard to awareness, engagement and competency.Barriers to engaging with financial matters are closely related to difficulties in accessing and understanding financial information.SamplingThe quantitative survey was conducted by telephone across a representative sample of 6,947 Australians aged 18 to 75. In proportion to their natural incidence in the population, the target sample for the survey included:people from non-english speaking backgrounds; Indigenous Australians; and Australians living in rural locations. Quotas were set by age and state to ensure a representation by age and geographic location. The following table provides an overview of the final sample size for women by age and state.FinaL SampLe oF Women by age and Statetotal vic nSW QLd Sa Wa nt taS act18 to 19 years old 87 27 35 13 4 6 0 2 020 to 24 years old 261 60 96 46 17 24 2 10 625 to 29 years old 365 95 117 74 29 31 7 8 430 to 34 years old 502 146 176 77 43 38 2 11 935 to 39 years old 511 124 152 113 38 55 7 15 740 to 44 years old 470 115 135 88 41 60 4 18 945 to 54 years old 871 210 293 157 65 98 18 16 1455 to 64 years old 651 165 224 109 57 57 7 19 1365 to 75 years old 420 117 142 80 25 40 2 8 6total 4,138 1,059 1,370 757 319 409 49 107 68% of total 100% 26% 33% 18% 8% 10% 1% 3% 2%A two-step process was used to achieve a stratified random sampling of individuals. Firstly, the electronic white pages was split by state and, within each state, every household had an equal opportunity of being chosen. within each selected household, the nearest birthday method (that is, asking to speak to the person in the household whose birthday is next to the date of contact) was applied to determine with which individual the interview would be conducted. If the person was not available, call back procedures were in place to ensure that the nominated individual was given every chance of being included in the study.72.when interviews were required in a foreign language, a suitably trained foreign language interviewer called the respondent to conduct the interview in the respondents own language.Follow-up qualitative research was undertaken. Interviews were conducted with a wide cross-section of different groups within the Australian population. These groups were mainly defined by their age, current working status, education and household income. Interviewees were sourced from the sample of quantitative survey respondents and were randomly selected from within each group.development workTo address the research objectives and take into account the findings of the exploratory research, an extensive quantitative questionnaire was developed. Testing was undertaken to ensure the appropriate wording and flow of questions, and that no technical measurement errors would affect data quality. Testing included:Cognitive testing of the questionnaire with a number of respondents across all age groups to ensure that the questions were worded appropriately and any potential for respondents to misunderstand the questions or response categories was minimised.pilot testing of the Computer Assisted Telephone Interviewing (CATI) survey was conducted for a number of interviews to detect any technical set up errors. The flow and structure of the questionnaire was also assessed on the basis of listening to the pilot interviews. Senior researchers debriefed the interviewers upon completion of the pilot to identify any difficulties with the flow and wording of the questionnaire prior to conducting the main study.The ABS Statistical Consultancy unit conducted a formal Forms Review of the survey instrument and the findings were used to improve the questionnaire.data collectionThe final questionnaire was programmed to ensure minimum data collection errors, and a number of checks were done including:using CATI to collect the benchmark survey data; and a simulation exercise with dummy data and tabular analysis to ensure all skips are correct. During fieldwork operations, DBm used quality control processes including:a senior researcher conducting interviewer briefing; continuous real time interviewer monitoring by DBm supervisors with 10-20% of each interviewers work being monitored; andup to seven call backs made at different times of the day and on different days of the week to ensure response rates were maximised.All DBm research staff are members of the Australian market and Social Research Society limited (Australia). This means they are bound by the Code of Conduct and the International Chamber of Commerce/european Society for Opinion and marketing Researchs International Code of marketing and Social Research practice.DBms telephone operations are accredited by market Research Quality Assurance which sets Australias industry quality assurance standards. DBm is accredited with AS4752, the relevant industry standard. In addition to existing fieldwork accreditation, AS4752 extends to all other research processes.The questionnaire required 23 minutes to administer. A response rate of 10% was achieved.73.Financial literacy Women understanding moneyFor the qualitative research, a mix of senior consultants and interviewers conducted the in-depth interviews over the telephone. This method allowed coverage of a wider range of population sub-groups in a timely and cost effective manner. All interviewers and consultants were specially trained on the subject by DBms leading social researcher who also conducted several of the interviews. The researcher supervised the teams fieldwork.On average, qualitative interviews lasted for about 30 minutes, ranging from 25 minutes to over one hour. All interviews were conducted in accordance with the Privacy Act 1988 and recorded for analysis.data analysisDBm analysed the data by:data weighting using ABS population statistics; data filling using models to predict missing values from information already provided by respondents (based on Chi-squared Automatic Interaction Detector procedure);exploratory cluster analysis to identify sub-groups within the population and how they varied in terms of the metrics in the questionnaire;cross-tabulation analysis to describe the relationships within the variables in the data; and tests of statistical significance to determine whether differences between sub-groups were real differences. All tests were conducted at the standard 95% level of confidence.74.appENdix 4: FiNaNCiaL LiTEraCy FOuNdaTiONThe Financial literacy Foundation was established in 2005 to give all Australians the opportunity to better manage their money.The Foundation aims to build the capacity of all Australians to better understand and manage financial risk, deal effectively with market complexity and take advantage of increased competition and choice in Australias finance sector.The Foundation is:providing a national focus for financial literacy issues; creating opportunities for Australians of all ages to learn more about money at school, through vocational and higher education, in the workplace and in the community;supporting the professional development of teachers; providing practical support to educators and trainers and working to improve the availability of quality financial literacy education resources;raising community awareness of financial literacy and its benefits through the Understanding Money website and handbook; andcollaborating with similar overseas organisations to enhance Australias approach to advancing financial literacy. The Foundation works in partnership with government, industry and community organisations and acts as a matchmaker by bringing together those organisations and individuals with complementary needs and skills and common commitment to advancing financial literacy.It receives independent and strategic guidance on financial literacy issues from the Financial literacy Foundation Advisory Board. For more information about the Financial literacy Foundation:email: financial.literacy@treasury.gov.auwebsite: www.understandingmoney.gov.aumail: Financial literacy Foundation The Treasury langton Crescent pARKeS ACT 2600Telephone (02) 6263 2111Financial literacyWomen understanding moneyFinancial literacy Women understanding money

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