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One in five struggle to find $1000 for an emergency...

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ALMOST one in five Australians would struggle to come up with $1000 to deal with an emergency, while one in three people spend everything they earn.

A survey of almost 5000 Australians shows a deep divide exists between households that are financially prepared to cope with current and future expenses and those barely able to meet their everyday commitments.
It shows many Australians, including higher income earners, are unprepared for financial obstacles.

A total of 17 per cent of people surveyed would struggle to find $500 to $1000 to deal with an emergency, while 30 per cent were living from pay cheque to pay cheque.

More than 40 per cent of respondents said they were able to meet their monthly expenses, but a third admitted they were worried about their ability to do so.

Deanne Stewart, General Manager of BT, which financed the survey, says the results clearly show there are a large number of people struggling to cope financially day to day, and the problems are not always linked to the size of someone's pay packet.

"In many instances people are living in the hope that they will achieve their goals rather than planning for a fulfilling and secure future," Ms Stewart said.

"This has implications for their health and lifestyle, impacting on their levels of stress, and in the longer term influencing their enjoyment in the years after they finish work."

Surprisingly, 57 per cent of those surveyed had no regular savings plan.

This figure peaks among 45 to 54-year-olds who are often nearing the height of their earning capacity.

It showed almost 40 per cent of people would not have enough savings to maintain their present lifestyle if they lost their income for three to six months.

A third of people worry about not being able to meet normal monthly living expenses and more than half can't save what they want to save.

http://www.news.com.au/money/cost-o...gle-to-find-1000/story-fnagkbpv-1226579779814

I've always been interested in this type of information, as I like to compare how I'm doing with others. Sometimes when I see people on the street, I automatically assume they are better off than I am, so this is interesting to know.

I'm not sure if it makes sense that 20% struggle to find $1000 for an emergency yet 33% spend everything they earn.

Anyway, this to me shows there is a huge lack in financial education amongst the general public.
 
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Living on the edge can become the norm for some people.

After a time, it's the context upon which they base their lives.
 
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And no mention of the fact that not only are many people not able to meet day to day expenses but they have maxed out their credit cards as well.
 
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For many of those who are "broke", they would still be broke whether their income doubled, tripled or halved.

It's like having a car with a hole in the bottom of the petrol tank. It doesn't matter how much fuel you put in, you are certain to run out simply because most of it is going to waste. It's the same with how some manage their money.

I know someone who earns roughly $100K and lives at home with parents. They are broke now just as they were broke 5 years ago. They'd struggle to find anything more than a few $ hundred. Where it goes I really don't know, but I do know that they'd still be in much the same situation no matter what their level of income.

Meanwhile I know others with young children and a mortgage to pay who live equally well, perhaps better, on a lower income simply because they are careful to avoid waste.:2twocents
 
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Also if the economy goes pear shaped all the people who have tightened their belt will say, lucky we did that.

The ones who didn't tighten their belts you will see on the 7.30 report.
 

skc

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Read up on how they find survey respondents... People on the streets in the CBD during lunch? Or Cold calling random number in the middle of the day? Those who has nothing to do in the middle of the day than answering surveys are probably more likely to have little emergency funds.

On comparing how you fare with others... aim higher, not lower.
 

prawn_86

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Those who has nothing to do in the middle of the day than answering surveys are probably more likely to have little emergency funds.

Bit of bias there also SKC, not just in the survey :p: Perhaps you could get an academic grant to delve deeper into your hypothesis ;)

My Mrs is home quite often in the middle of the day due to the hours she works and studies and would probably answer a survey.

I have always thought the same about funeral insurance though. If my partner/family cant find 5k at short notice to bury me then there is something seriously wrong imo
 
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Bit of bias there also SKC, not just in the survey :p: Perhaps you could get an academic grant to delve deeper into your hypothesis ;)

My Mrs is home quite often in the middle of the day due to the hours she works and studies and would probably answer a survey.

I have always thought the same about funeral insurance though. If my partner/family cant find 5k at short notice to bury me then there is something seriously wrong imo

...apart from the fact that you are dead that is :p
 

skc

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Bit of bias there also SKC, not just in the survey :p: Perhaps you could get an academic grant to delve deeper into your hypothesis ;)

My Mrs is home quite often in the middle of the day due to the hours she works and studies and would probably answer a survey.

I have always thought the same about funeral insurance though. If my partner/family cant find 5k at short notice to bury me then there is something seriously wrong imo

There are plenty of academic papers on sampling bias I am sure... sorry I haven't the time to dig them up for you.

But I've done a few market research survey designs etc in my prior career so what I said is not anecdotal or personal view, but they are good market research principles that practitioners follow. Many research agencies these day send surveys out to those "answer a survey and get 20c" type companies for online surveies... and inevitably you get substantial sampling bias because of the type of participants who are on their list.

Anyway - without more information it's impossible to know what to make out of the survey.

 
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I have always thought the same about funeral insurance though. If my partner/family cant find 5k at short notice to bury me then there is something seriously wrong imo

What is the deal with all the funeral insurance ads on daytime TV? Sometimes I'll be watching Days of Our Lives (it hasn't been the same since Marlena was possesed by the Devil and levitated)and every second ad seems to be for funeral insurance. Are there that many people whose family couldn't pull $5k together to pay for a funeral?

 
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What is the deal with all the funeral insurance ads on daytime TV? Sometimes I'll be watching Days of Our Lives (it hasn't been the same since Marlena was possesed by the Devil and levitated)and every second ad seems to be for funeral insurance. Are there that many people whose family couldn't pull $5k together to pay for a funeral?


Sampling bias at it's best! We assume that everyone on ASF is what constitutes normality.

Given the amount of ads, there must be enough demand to support the industry. Given that so many people are in large debts and/or have illiquid assets (e.g property) I don't doubt that this is not true (people not being able to afford $5K on the spot).

I agree with Tyler's earlier comment regarding seeing others and assuming they are better off. My dad drummed this into us from an early age and I thank him for it. Just because someone is driving a shiny car, does not mean he can afford it. Till this day he drives a second hand corolla when he can easily afford to get a new merc or even a porsche.
 
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prawn_86

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Anyway - without more information it's impossible to know what to make out of the survey.

Yeh true. One would hope that it is designed in a way to capture a wide range of data.

We had a uni course where sampling bias and how to construct surveys was drummed into us also, although the Uni i went to was pretty cutting edge for marketing rather than just reguritating from a textbook
 
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What is the deal with all the funeral insurance ads on daytime TV? Sometimes I'll be watching Days of Our Lives (it hasn't been the same since Marlena was possesed by the Devil and levitated)and every second ad seems to be for funeral insurance. Are there that many people whose family couldn't pull $5k together to pay for a funeral?


My Gran is paranoid about funeral insurance.

She was proudly telling us she's got it all sorted so that when she falls off her perch the family wont have to find the money for funeral and burial costs.

Maybe it's why everyone tries to buy a house, because otherwise they just wont save??
 
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For many of those who are "broke", they would still be broke whether their income doubled, tripled or halved.

It's like having a car with a hole in the bottom of the petrol tank. It doesn't matter how much fuel you put in, you are certain to run out simply because most of it is going to waste. It's the same with how some manage their money.

I know someone who earns roughly $100K and lives at home with parents. They are broke now just as they were broke 5 years ago. They'd struggle to find anything more than a few $ hundred. Where it goes I really don't know, but I do know that they'd still be in much the same situation no matter what their level of income.

Meanwhile I know others with young children and a mortgage to pay who live equally well, perhaps better, on a lower income simply because they are careful to avoid waste.:2twocents

I started out on 40k a year. I was always broke. Now my income has more than doubled I have more money than I can spend if I wanted to spent it all I could not.

Try living and renting in THIS economy (not the one 10 years ago) on 40 odd k a year before judging others.
 
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ABS result for financial stress indicator.

abs.jpg

At least their sample selection is robust - you could never know about respondent's interpretation and truthfulness/accuracy.
 

nulla nulla

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Bit of bias there also SKC, not just in the survey :p: Perhaps you could get an academic grant to delve deeper into your hypothesis ;)

My Mrs is home quite often in the middle of the day due to the hours she works and studies and would probably answer a survey.

I have always thought the same about funeral insurance though. If my partner/family cant find 5k at short notice to bury me then there is something seriously wrong imo

...apart from the fact that you are dead that is :p

Not that you would know about it or be able to do anything about it. You are dead. Pay up that insurance policy and let your partner know it exists.
 

nulla nulla

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The other perspective is, of course, your family could have a really nice holiday for $5,000 and you could have a paupers funeral. what difference would it make or matter to you?
 
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I must be missing something but why does anyone actually need funeral insurance? We have had quite a few funerals in the family over the past few years and none of us had to stump up $5,000 for a funeral, the costs of the funeral were simply paid out of the estate of the person who had died.
 
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I started out on 40k a year. I was always broke. Now my income has more than doubled I have more money than I can spend if I wanted to spent it all I could not.

Try living and renting in THIS economy (not the one 10 years ago) on 40 odd k a year before judging others.
I have lived on well below average income for many years and I have lived on a well above average income too. In both cases I have been careful to always spend less than I earn. Always.

I don't doubt that it's not a lot of fun being on lower income but I don't agree with the notion that a pay rise results in people saving the money. A lot will just get a bigger house, newer car etc and remain "broke" forever. At least that's my experience of life thus far - seen it many times.
 
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My Gran is paranoid about funeral insurance.

She was proudly telling us she's got it all sorted so that when she falls off her perch the family wont have to find the money for funeral and burial costs.

Maybe it's why everyone tries to buy a house, because otherwise they just wont save??

Sometimes, its not necessarily about the money for these funeral plans, they want it done to their specifications, which is fair enough.
 
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