Statistically, tradies, truckies, remote, rural and blue collar workers have some of the worst adult financial literacy rates in Australia and it is quite literally putting their lives and livelihoods in danger. In fact, data indicates that poor financial literacy is highly correlated with financial stress which in many cases can lead to feelings of shame, guilt and isolation, all of which are a breeding ground for more serious mental health issues.
It is easy to ignore statistics like this and think that it applies to everybody else but you, especially when the term financial literacy has become a bit of a buzzword of late.
If you pressed most tradies for an answer as to what poor financial literacy looked like, they would probably point you in the direction of the apprentice that is living paycheck to paycheck or the one guy that seems to find himself with a horrendous tax debt every year.
But, what if you asked everyone on the average worksite if they knew how much they had in superannuation? There’s a good chance you would get a few people that could give you an exact figure, maybe a couple of people that had a general idea and probably a whole heap of guys telling you to chill out and that they didn’t need to worry about that kind of thing.
This question might sound like an unfair way to gauge how much knowledge someone has of their financial situation but in reality, for most Australians, their superannuation is their second most valuable asset after their family home and for those of us who aren’t homeowners there is a good chance that it is our most valuable asset.
So, with only 35% of us actually knowing how much one of our most valuable assets is worth, good financial literacy clearly comes down to a lot more than being able to tell if your boss has stooged you on your latest payslip.
The good news is that you aren’t alone and that there are plenty of resources out there to help blue-collar workers navigate tax, debt, budgeting, investing and saving. These tools will provide you with the opportunity to gain a better understanding of your financial position and improve the way you manage your money going into the future.
Be honest with yourself and those around you
Being honest with yourself about where you actually are with your finances and how much work you actually need to do is the first step in improving your financial literacy but it is often the hardest one to take. However, it is important to recognise that speaking up earlier means that you will have more options when it comes to getting back on track whether this is through refinancing or a loan modification. Additionally, by contacting your creditors sooner rather than later, they are more likely to be understanding and offer you financial hardship assistance if they believe you are eligible.
See an expert
Accountants, financial planners and financial counsellors offer services that are meant to be used. Just like a plumber doesn’t expect a client to be able to fix their own toilet, financial experts don’t expect you to know everything about tax law or budgeting and are willing to help. Seeing a professional will not only allow you to gain a better understanding of where your finances are currently but they will be able to help you understand the steps you need to take to move forward.
Make a long term plan
Once you find yourself in a less precarious position, it is important to understand what you are working towards so that you don’t fall back into old habits and that if something does happen in the future you have savings to rely on. This plan will look different for everyone because we all have different goals and values, so, for some people investing might be on the cards and for others, retirement might be looming closer and maximising superannuation might be a priority. But, at a minimum your long term plan should incorporate a budget and some long and short term savings goals. For example, if you struggle with impulsive spending your budget will need to account for this and if you own your own business it will need to take tax time into account. The same logic applies to saving goals, for apprentices going travelling or buying new tools might be a priority but for someone older they might be more focused on buying a house or starting a business.
Overall, financial health is one of the key factors when it comes to tradies experiencing higher levels of stress and it is important to start changing the culture around how we talk about it with our friends and family. Demystifying the conversation around finances and increasing the education available to all tradies, truckies and blue collar workers about how many aspects of their life money can impact is one of the ways we can start to change the statistics around mental health in these industries.