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COVID still hitting young people in the wallet – how can you get your finances back on track?

COVID still hitting young people in the wallet – how can you get your finances back on track?

While much of Australia is on a road to recovery after the past few years of financial ups and downs, Australians under 24 are still struggling to shake off the financial effects of the COVID-19 pandemic, according to a new report.

The ANZ Roy Morgan Financial Wellbeing Indicator found that while the overall financial wellbeing of Australians increased 2.8% to 59.1 out of 100 between March and December 2021, young Australians were the exception, with recoveries being recorded in all age groups save for those aged 14 to 24.

Additionally, those aged 14-24 were found to have also experienced the largest decline in financial wellbeing during the first year of the pandemic, down 7.3% between March 2020 and March 2021.

This was partly attributed to almost one-quarter (23.4%) of this age group being employed in industries that were strongly affected by lockdowns, such as hospitality and retail.

ANZ social impact research and reporting lead, Natalie Paine, said: “There are many reasons younger Australians are taking longer to recover financially from the pandemic. Many have lost confidence in managing their money and are more likely to say they would have difficulty coping with a demanding job, compared to the general population.”

However, it’s possible that there could be light at the end of the tunnel. According to the most recent Household Impacts of COVID-19 Survey from the Australian Bureau of Statistics (ABS), in March 2022 20 per cent of households reported that COVID-19 had affected work arrangements in the household in the last four weeks; a decrease from 26 per cent in February when the Omicron variant was more prevalent.

Furthermore, the ABS found that Australians were less likely in March 2022 to report they felt nervous in the last four weeks (22 per cent compared with 35 per cent in April 2020), and less likely to report feeling restless or fidgety (26 per cent compared with 42 per cent in April 2020).

Young people experiencing financial stress have a range of potential options to consider. One could be to perform a financial health check – compare your financial products and services with other options to work out which choices may best suit your needs.

You may find that by switching your bank account, super fund, credit cards and/or Buy Now Pay Later service, phone or internet plan, you could pay less in fees and/or interest and enjoy more value-adding features and benefits. Even small changes could make a big difference to your long-term financial future, from your bank balance to your credit score.

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This article was reviewed by Personal Finance Editor Alex Ritchie before it was published as part of RateCity's Fact Check process.

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