Source: Daily Telegraph
By Karina Barrymore
Gen Xers are struggling to make ends meet
Generation X is in danger of becoming generation debt, as many Australians aged 30 to 50 are our least financially secure and are struggling under a record high level of debt.
A new survey for bank RaboDirect found about 40 percent of Gen X say their financial situation has worsened during the past year, one-third don’t have enough emergency money to last more than two months, and one-third regularly only just manage to make it through to their next pay day.
Gen X makes up about 33 percent of the Australian population, according to the last Census, or about 6.6 million people, which make them an influential group, RaboDirect general manager Greg McAweeney says.
“Among an unstable property market and increasingly worried investors, the latest statistics show that one in three Gen X are scrimping and saving to make ends meet,” he says.
“Almost 2.5 million Australians in this age group always feel like they’re in the red.”
Debt recovery company Dun & Bradstreet also says Gen X is weighed down by record debt.
“For years we have been talking about whether Baby Boomers have been saving enough for their retirements,” Den & Bradstreet chief executive Christine Christian says.
“However, not enough attention has been paid to the fact that Gen X is carrying more personal debt than any other previous generation at a similar age”.
“Around 40 percent of Gen X said they would find it difficult to meet their credit obligations, with a similar proportion reporting they would use their credit card to buy something they otherwise couldn’t afford,” she says.
“With competing financial priorities, Gen X is clearly finding it difficult to balance their books.”
Survey company TNS Consultants, the company hired by RaboDirect, found that 30 to 50-year-olds have a high incidence of home loans and other borrowings compare with other age groups and are often more vulnerable to movements in interest rates.
“Around two-thirds have a credit card but in terms of repayments, this group is more likely to just make the minimum payment,” TNS director of finance and business Richard Stevenson says.
Baby Boomers, people aged 50 to 65, are the most confident about their finances, the survey results found.
They know at what level the current interest rates are and they find dealing with their finances less stressful
Credit rating company Veda Advantage senior adviser Matthew Strassberg suggest these tips for all age groups to avoid getting into financial trouble:
- Pay bills on time.
- Call organisations you money to, explain your situation and work out a solution.
- Keep all types of credit applications to the minimum.
- Don’t try to cheat the system when applying for credit.
- Check your credit file at mycreditfile.com.au