Wesley Mission “Impact” Survey
Monday, 20th November 2006 at 11:31 am
Wesley Mission has called for a whole of community approach in addressing the issue of economic strain and anxiety following the release of a major survey on the impact of financial stress on individuals and families.
The call comes following the results of a study conducted by Wesley Mission and a team of social researchers from Urbis Keys Young. It shows that more than half (58 percent) of Sydneysiders claim that financial stress had an impact on themselves, their family or the broader community.
The survey of more than 400 Sydney residents, conducted in August 2006 and shortly after the August 2 rise in mortgage interest rates, reveals that one in three households in the Sydney metropolitan area was anxious about their ability to meet expenses for the coming year.
Eighty one percent of respondents reported facing some level of financial stress over the past six years.
Wesley Mission says that more alarming was the fact that four in ten households in the Sydney metropolitan area would be unable to draw on their savings or redraw on their mortgage if faced with an unexpected one off expense of $2000.
The Superintendent of Wesley Mission, Rev Keith Garner says that what is very worrying is that almost 15 per cent of households would find it difficult or totally impossible to meet a regular increase of $40 per week in household expenses such as rent or mortgage increases.
Just under half (45 per cent) worried more about money than they used to (following the three consecutive interest rate rises over 12 months). Stress was greatest in west and south-west Sydney.
There were a significant number of households that reported that financial stress or anxiety contributed to serious social problems such as relationship breakdowns, substance abuse, frequent gambling and violence.
Of the total sample:
• 5.8 percent said worry about money contributed to relationship breakdown
• 3.5 percent said worry about money contributed to substance abuse
• 3.3 percent said worry about money contributed to increased or frequent gambling
• 1.3 percent said worry about money contributed to violence in the relationship.
More than three quarters of households have credit cards and almost 40 percent have two or more, one third of households have a mortgage and a third of households have other loans.
The study indicated that there may be a link between financial stress and substance abuse with 3.5 percent of the total sample said worry about money contributed to substance abuse. Of the 103 participants who said that stress about money affected their relationships, 14 per cent said stress about money contributed to heavy drinking or substance abuse.
Money worries were compounded by poor financial literacy with one in three households feeling that they did not stay on top of their financial affairs.
• Two thirds learnt to manage money by self teaching,
• 18 percent learnt through family, and:
• less than 20 percent of households had any formal education on money management.
Almost 40 percent of households have never had a budget and a further 26 percent who have drawn up a budget rarely keep to it.
The survey found that only 17 percent took steps such as budgeting or seeking expert advice, while 18 percent sourced additional funds such as further borrowing, selling assets or working longer hours.
Rev Garner says financial pressure in households is a hidden problem that needs to be addressed through collaborative efforts of the community, governments and corporations.
He says there is no quick fix solution but the issue is one that requires focus from all of the community so that a clear policy and social agenda can be developed, addressing the issue in a holistic way.
In the coming months Wesley Mission will be holding a series of forums embracing a variety of stakeholders – government representatives, representatives from the finance and retailing sectors, other community service organisations and people who are impacted by the issue – with the aim of developing a white paper as a way forward.
Wesley Mission says while acknowledging that governments at both State and Federal levels are working hard at solutions, financial literacy and legislative change must also be balanced by cultural and educative initiatives.