Amid increasing RBA rate rises and cost-of-living pressures, money is on the minds of most Australians. However, young people are particularly vulnerable to the physical and mental effects of financial stress.
Financial issues are affecting the mental health of 83 per cent of young Queenslanders aged 18 to 41, compared with 80 per cent in NSW and 84 per cent of Victorians, a YouGov study commissioned by UBank shows.
Young Australians are feeling the effects of financial stress.Credit: .
Two out of three young Australians were also experiencing physical effects from financial stress, and seven out of 10 agreed their relationships with friends and family were being affected.
Ubank head of growth Sebastian Paulin said rising interest rates and inflation were forcing borrowers to make tough financial choices.
”Think of it this way, the average borrower with a $500,000 loan is likely paying roughly $1000 more per month on their mortgage than they did when rates started to increase,” he said.
“That’s huge, and it disproportionately impacts first-time borrowers or those early in their homeownership journey.
“So unless you’ve successfully negotiated a significant pay bump or started to pick up some income on the side, you’re going to be forced to make some hard choices between your wants and what you absolutely need.”
The top three reasons for financial stress are difficulties in budgeting and juggling everything with the rise in living costs, savings running low/running out, and not having enough savings for emergencies or unexpected expenses.
Paulin said it was important to have a buffer and banks and financial institutions were offering support and solutions for customers. Banking apps were also useful tools.
“Our research found that those who use personal finance apps are twice as likely as those who don’t to say they are looking to buy a property in the next five years and are confident that they can (48 per cent compared to 24 per cent),” he said.
