Savvy 2020 Financial Literacy Survey

Find out how much Aussies know about basics finance and economics

Last updated on June 8th, 2022 at 05:15 pm by Bill Tsouvalas

Takeaways from the Savvy 2020 Financial Literacy Survey 

Here are some insights and tips looking at our survey on financial literacy in Australia – and how you can make better financial decisions for you and your family. 

A Majority of Australians Pay Their Credit Cards on Time 

Most respondents to the survey said they have a credit card (55.6%) and of those, 51.3% said they paid off their credit cards on time.  

So, what about the 48.7% who said they don’t? 

Most credit cards have high interest rates that carry on from month to month – this is known as “revolving” credit. If you have a balance of $3,000 and only pay off the minimum – 2-5% in most cases – this will add more interest to your bill each month. Let’s imagine that you have that balance, pay 2% each month (the minimum) have a middle-of-the-road interest rate of 18%p.a. 

It would take you seven years and ten months to pay off the balance – by which point you will have paid $2,586 in interest! 

That interest could be better spent on saving for a holiday, saving for an emergency, a new appliance to replace a broken one, a deposit for a car, or investments. 

If you have credit card debts that you are struggling to get on top of, you may want to consider consolidating debts with a personal loan. 

Consolidating debts using personal loans 

You can consolidate smaller debts such as credit cards using personal loans. You will have to talk to a broker and apply for a personal loan which will “wipe out” the credit card debt, effectively transferring it into a personal loan. A personal loan has significantly lower interest rates than credit cards and each payment you make gets you closer to being debt free.  

Using the above example, a five-year personal loan at 10%p.a. will only attract $834 in interest – a massive saving of $1,732! 

Auditing your finances 

To help prevent getting into financial trouble, you should audit your finances at least once a year. That means looking at your income and where you are spending your money. 41.2% said they’d never audited their finances; this should be preparation for taking on major investments (a house, for example), whether your family wants a child, and general financial health.  

Four in five Australians have never seen a Financial Adviser 

83.9% said they’d never seen a financial adviser – though financial advisers can charge a lot, it’s an investment in your own financial literacy as an Australian and as someone who wants to grow their wealth. The 53.3% of respondents who say school should intervene won’t cut it – once we get to adulthood, we need to take responsibility of our finances and wealth and just like getting a personal trainer for fitness, a financial adviser is like a “personal trainer” for wealth. 

About Savvy

Savvy is one of Australia’s largest online financial brokers, focusing on personal and commercial financial products. Founded in 2010, the firm has seen rapid growth, a testament to their provision of market leading rates and reaching customers with the latest in media and technology. Savvy is a proud supporter of Kids Under Cover, a charity assisting homeless and at-risk youth to strengthen their bonds to community and education. Savvy was named one of BRW’s fastest growing companies in 2015.