Thursday, July 7, 2011

Banks don´t understand our relationship with money - why we choose shoes instead of super

Australia is the "no worries" nation, constantly smiling, unconcerned about those things that we in Europe find hugely Important. When I´m back in Sweden I am stunned by how people care about things - world politics, relationships or the weather. They frown, are serious and want to deep talk through everything.

I used to be the same... Debating politics, being angry and focused on the Problems. Now - living in the sunny country - I´ve realised that I don´t have to care so much; the culture rubs off on me, making me "irresponsible" in European eyes, but "happy" in mine...

It is great that Aussies are light hearted. But the Problem (see... I´m concerned again!! Lol) is that when it comes to things like saving and retirement planning, Australians are in trouble.

A fresh Roy Morgan report shows that over 7.5 mllion Australians with superannuation have not started planning for retirement - including 1 million in the 50-64 age group. The survey showed that around 40% of those with superannuation had used a financial planner, with this rising to 59% in the pre-retirement age group (aged 50-64).

I have in my research I found tons of similar statistics, and here are some:

- Australia is the 4th most optimistic country in the world.
- 89% of Australians say they are not likely to have an accident in the next 20 years.
- 80% say they were not likely to suffer a serious illness in the next 20 years.
- Working Australians are least able in the world to estimate their retirement incomes.
- Only 33 % of 31-36 year olds have started to prepare for retirement, compared with 68% in the US. 
- Almost one third of Australians admit to never reviewing their retirement plans and only 25 % said they annually review their retirement plans.
- Throughout the 1980s, the average Australian household owed less than $50 in debt for every $100 in income. Since 1995, that figure has more than tripled to almost $160 in debt for every $100 of income.
So... Aussies living day by day... 
The problem is that those who could help us get on track refuse to understand us. When I worked with strategy for a bank I was met with the attitude: "people don´t know enough about money, so all we need to do is teach them". Uuuuh... It´s not exactly that easy. You can hardly say it´s a lack of Information that leads people to waste their income on shoes instead of super.
When viewing the issue closer - by talking to people in an honest way - you find complex feelings, steering them to poverty. For example, most people carry guilt when it comes to money. We are all tempted by the sales, and we know we are not supposed to, so when shopping another bag of goodies we do our best to suppress the grown up voice inside, telling us we should save, not spend.
This is why so many avoid financial planners and Information who will increase the feeling of guilt, telling us we have been BAD. This is why so many go to mum for advice instead. This is why so many shun the banks.
Banks can be intimidating, just like the besser-wisser personal trainers or nutritionists. Aaah, don´t we all know that we should eat well, train heaps and put cash aside? We know. But we still carry those extra kilos.
The challenge for banks, governments and financial institutions is to respect people´s fears and imperfections, and be gentle. Understand that what we lack is not about the practical, but about the mysterious sensations in our hearts.

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