A new report released by NAB has revealed that Australians believe that around $830,000 would grant them ‘financial freedom’, with those living in NSW stating that they would need around $1 million.
According to the third annual NAB Special Insight Report into Financial Freedom, more than 2,000 respondents were asked how much money they would need to secure in order to “significantly improve their lives forever”.
The responses differed depending on demographics and geography, but Australia-wide, the figure came in at $828,000. This is $69,000 more than was stated last year (when the figure was $759,000).
Those living in NSW/ACT said they would need $1 million to “significantly improve their lives forever”, while those in Victoria said they needed $788,000.
The figure also went up in Western Australia and Queensland, rising from $703,000 to $736,000 in the western state and from $622,000 to $683,000 in the eastern state.
Notably, those in South Australia/Northern Territory had significantly changed their response from last year – with the figure coming in at nearly double that from the 2017 survey. This year, they said they needed $809,000 to be financially free – up from $404,000 last year – meaning that South Australians and Northern Territorians would now need more money than Victorians in order for their lives to be significantly improved.
Tasmanians required the least amount of money, just $337,000, up from $285,000 in 2017.
Demographically, men generally reported a higher figure than women ($899,000 compared to $759,000) with the disparity much larger for younger adults; young men stated they would need $984,000 to be financially free, while young women only needed $474,000.
However, on a year-on-year basis, women said they needed more this year when compared to last year, with the figure rising by $92,000 (while men only needed $45,000 more on average than they did last year).
Again, the difference in the younger demographic was more pronounced – with young men requiring almost $220,000 more than last year, while young women on average needed $57,000 less than in 2017.
Interestingly, when asked how they would use a major financial windfall, the NAB survey found that the largest proportion of people would use the money to pay off debts (36 per cent), while nearly a third (32 per cent) said they would save it or use it to help their families.
This was followed by taking holidays and travel, investment, keeping it for emergencies, buying a new home or buying a new car.
Just 1 per cent of people said they would use the money to buy personal items or spend it frivolously.
The NAB survey also found that just 4 per cent said they would work less or retire should they receive a major windfall.
“Many Australians dream of a major financial windfall to change their lives – but it turns out we don’t need a mega million-dollar jackpot to feel financially free,” NAB group chief economist, Alan Oster said.
“For some, being “financially free” means being able to pay off all their debts, for others it could be no longer having to earn a salary, or it might just be not being stressed about money.”
“Unsurprisingly, where you live, how much you earn, your gender, and your relationship status impact how much you think you will need,” Mr Oster said.