According to the Reserve Bank of Australia, most Australian households are holding up remarkably well under financial pressure.
Mortgage repayments are largely being met, household savings remain relatively strong, and the financial system continues to demonstrate resilience.
That’s encouraging news. But I wonder how many Australian families would describe their own financial circumstances in quite the same way.
Because there’s a difference between being financially resilient according to economic statistics and actually feeling financially secure.
In its October Financial Stability Review, the Reserve Bank reported that most mortgage holders remain well placed to manage ongoing financial pressures. Despite higher interest rates and living costs, relatively few borrowers are falling seriously behind on their repayments.
From an economic perspective, that’s a positive outcome. But those stats cannot capture the family that has stopped taking holidays because the mortgage consumes more of their income.
The couple postponing renovations or delaying plans to start a family. Or the professional earning a healthy salary but working additional hours simply to maintain their lifestyle.
One of the challenges with measuring financial wellbeing is that we tend to focus on what people earn, own and owe. These are important measures, but they tell us relatively little about the quality of someone’s financial life.
What matters is the relationship between money, commitments and the life someone wants to lead.
