Most Australians are ‘bad with money’. The reason why is frightening

2 weeks ago 4

By Pascale Helyar-Moray

November 19, 2025 — 5.01am

We love to think the problem is ignorance. That Australians don’t manage their money well because nobody ever taught us, with the blame pinned on the education system or our parents.

It’s an easy narrative with an apparently simple solution set: implement lessons in schools, publish more how-to guides, create more calculators.

Younger Australians have particularly poor financial literacy.

But after decades of working in financial services, I’m convinced the real issue isn’t that most people can’t understand money. It’s that they won’t look at it.

How else to explain why so many 30 and 40-somethings can’t give a ballpark estimate of their superannuation? Or define simple investment concepts such as the risk-reward tradeoff, when they’re found on every social media platform? This is financial avoidance. And it’s much more dangerous than ignorance.

The unopened envelope problem

If you want to understand avoidance, find your unopened superannuation statement. For many Aussies, it’s probably in the bin.

People know it’s important. But looking at it means facing reality – and then having to make an active decision. And with money, decisions feel fraught.

So we leave the envelope sealed. We put off logging in to our accounts. We nod politely but don’t engage in our financial advisory meetings. This isn’t laziness. It’s psychology.

The reasons for financial avoidance have been well documented by behavioural economists. Loss aversion means we feel the pain of loss more than the pleasure of an equivalent gain.

Present bias is our preference for immediate comfort to overrule future benefit. And cognitive overload is the state we enter when a decision feels too complex.

The longer we avoid our finances, the harder it becomes to take control.

When these behaviours are added together, they incentivise keeping money at arm’s length, lest it spark anxiety, guilt or shame. How do we regulate those feelings? By not engaging.

Here’s the uncomfortable truth: You can be numerate, educated and successful – and still be financially avoidant. I’ve seen highly successful women with high-powered jobs in financial services who do not know how to budget. Equally, I’ve seen educators who teach compound interest but don’t apply that concept to their own super balance.

Why more literacy alone won’t fix it

Teaching people the mechanics of interest rates, diversification and superannuation through financial literacy campaigns is vital. But literacy without engagement is like expecting Olympic-style fitness just from giving someone a gym membership.

Literacy programs only have short-term behavioural impacts, as they don’t address the underlying emotional relationship people have with money. If that relationship is one of fear, shame or mistrust, more knowledge often leads to further avoidance by reminding the person of what they’re not doing.

If we want Australians to master their finances, we need to tackle the emotional barriers in tandem with the informational ones.

This is where industry leaders - the banks, super funds, media outlets and policymakers - need to step up by making financial engagement feel actively rewarding.

Make money feel relevant now
The human brain struggles to compute distant goals, as demonstrated by the mass population’s disengagement with their superannuation.
Normalise the conversation
Money talk in Australia is still laced with taboo. Media can help here by showing more diverse stories; we need to read honest accounts of mistakes and ongoing struggles, as well as the success stories.
Lower the emotional stakes
Behavioural design, bite-sized information and opt-out defaults all make engagement less daunting. Add a breadcrumb trail to your user’s journey, congratulate them for completing a task – it all makes a difference.
Reward engagement, not just outcomes
Imagine if super funds sent a thank-you message simply for logging in, or if banks celebrated customers for reviewing their insurance. Building habits starts with recognising the act of showing up.
Use more relatable language
As a result of needed – but stringent – compliance, the language around money and investments is onerous. The key is to make it relatable and friendly, with metaphor and story-telling.

A call to look

Breaking financial avoidance requires repeated, low-friction opportunities for people to see and interact with their money, without judgement. It also requires compassion, both from ourselves and from the institutions that serve us. Shaming people into action is not the answer.

So when you come across that unopened envelope, don’t berate yourself – simply open it. I promise the feeling of discomfort and discombobulation will pass.

The longer we avoid our finances, the harder it becomes to take control. You need to ask yourself: do you own your money or does your money own you?

Financial literacy can give us the tools. But only in facing our money truths will we find financial freedom.

Pascale Helyar-Moray OAM is the superannuation and wealth expert for Finder. She is also a multi award-winning entrepreneur, speaker, author of Rich Woman, Poor Woman and the podcast Dare to be Rich.