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Deer in the headlights: 1 in 3 Australians feel unfit to make financial decisions during inflation

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Millions of Australians feel unfit to make financial decisions during times of uncertainty, according to new research by Finder.

A nationally representative survey of 1,053 respondents revealed 1 in 3 (32%) Australians – equivalent to 6.4 million people – don't feel equipped to make financial decisions during times of inflation.

Australia is experiencing the highest level of inflation in decades, with many (16%) having never experienced a period like this before.

Data from the Australian Bureau of Statistics (ABS) revealed inflation had risen to 7.8% for the year to December 2022 quarter – the highest level since March 1990. The latest monthly inflation data for February 2023 shows inflation has decreased slightly to 6.8%.

Housing (including energy) at 9.9%, food and non-alcoholic beverages (8%), and transport (5.6%) are some of the top drivers.

Almost 1 in 10 (9%) Aussies without access to a financial adviser, feel unqualified to make financial decisions during periods of inflation.

A terrifying 7% have no idea how inflation will affect them and their finances.

Rebecca Pike, money expert at Finder, said Australia is experiencing record inflation with the cost of virtually everything rising at full force.

"As Australians attempt to navigate through this difficult time, it's extremely valid to feel unprepared.

"A significant number of people, especially those who are younger, will have never experienced times like this before."

Young people feel the most unprepared – almost half of gen Z (49%) feel ill-equipped to make financial decisions during periods of inflation, compared to baby boomers (18%).

The gender gap is huge – women (42%) are almost twice as likely than men (22%) to say they feel incapable of making financial decisions during times of inflation.

Pike said one of the most important things you can do during this unknown time is educate yourself on inflation and its impacts on your finances.

"Keep up to date with the latest news and information about what's happening with inflation in Australia.

"Setting a budget is particularly important during inflation, and can help you identify where to cut back and make adjustments on your spending.

"It's crucial to consider any financial action you take that could affect your long-term goals. If you're struggling, consider speaking to a financial advisor who can provide you with personalised advice," Pike said.

Do you feel equipped to make financial decisions during times of inflation?
Yes, I know how inflation affects me31%
Yes, I have experienced inflation before28%
No, I have never experienced a period of inflation before16%
No, I do not have access to a financial adviser9%
Yes, I have access to a financial adviser9%
No, I do not know how inflation affects me7%
Source: Finder survey of 1,053 respondents, January 2023
Do you feel equipped to make financial decisions during times of inflation?
Baby boomersGen XGen YGen Z
Yes, I have experienced inflation before43%39.00%16%14%
Yes, I know how inflation affects me28%31.00%37%27%
Yes, I have access to a financial adviser11%5.00%11%11%
No, I do not have access to a financial adviser9%10%9%9%
No, I do not know how inflation affects me5%7%7%9%
No, I have never experienced a period of inflation before4%9%20%31%
Source: Finder survey of 1,053 respondents, January 2023

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