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How much do you need to be financially free?

20/04/2022

How much do you need to feel financially free?

 

NAB has put a dollar figure on the magic number Australians think they need to "significantly improve their lives forever."

 

The average Australian believes they need $828,000 - up 9% over last year - to turn around their life financially. However, the figure swings depending on where you live, your job, your level of education as well as gender, age and marital status.

 

New South Wales residents said they would need a windfall of $1 million while Tasmanians said just $337,000 would do. South Australians and Northern Territory residents have doubled their financial desires, reporting they need twice as much going forward ($809,00) than they did last year ($404,000). Victoria is the only state where residents trimmed down their financial magic number", saying they need $788,000 - 8.8% less than last year.

 

The results come from a NAB special insight report. Five NAB economists led by group chief economist Alan Oster surveyed 2000 Aussies to drill down to the findings.

The economists also asked people how they would spend their money if there was a major financial windfall. Only 1% said they would go luxury shopping and 4% said they would retire early or work less. One in three people interviewed said they would use the money to pay off debt or put it towards their family.

 

The average Aussie man put his wishlist figure at $899,000 which is $140,000 more than what the average Australian women pegged it at.

 

The gender disparity in expectations was more pronounced among younger people - young men swelled their needs by $220,000 over the previous year while young women axed them down by $57,000.

 

Overall, women are upping their financial needs faster than men, NAB says. On an average, men needed $45,000 more over the previous year but women said they needed $92,000 more.

 

Interestingly, professionals still think they need just over $1 million for a financial transformation but labourers say they need more at $1.3 million - double over the past year.

 

High school graduates also thought they needed more money (about $1 million) as compared to grads or postgrads ($942,000).