It is estimated that 1.39 million Australians travel overseas yearly, yet 53 per cent are unaware of the basics of exchange rates, according to research released today. Moreover, 30 per cent of Aussies are ignorant of fees associated with international money transfers.
The findings were released in a survey of an independent panel of 1002 Australians, commissioned by global comparison service moneytransfercompariso
It was revealed in the research that 40 per cent of Australians falsely believe an ‘exchange rate’ is a fee added to international money transfers by banks. In comparison, the correct answer defines an exchange rate as the rate at which one currency can be exchanged for another cash.
Despite being the most eager travellers, 70% of those under 34s can’t grasp exchange rates.
Gen Z and younger Millennials deemed the most active overseas travellers, are the least knowledgeable about exchange rates, with almost 70 per cent of respondents aged 18-34 completely missing the ball. Despite being less inclined to travel, Aussies over 55 have the most robust understanding of exchange rates, with 50 per cent confidently and correctly identifying the concept. The older age group also has the best understanding of international transfer fees, with more than 70 per cent aware of its meaning.
Russell Gous, the spokesperson for Money Transfer, believes the changing way Australians manage their overseas travel budgets explains the generational differences: “Those over 55 will remember when they couldn’t travel anywhere without getting travellers cheques or exchanging cash for foreign currency at the airport, and shopping around for the best rates. The younger generations are used to an increasingly cashless travel experience, where exchange rates are largely unseen. The lack of awareness could create massive issues for their travel budget.”
South Australians Lead, Victorians Lag.
South Australians exhibit the highest level of expertise in defining ‘exchange rates’, with nearly 60 per cent of the population accurately identifying this concept. On the other hand, Victorians display the worst awareness of exchange rates compared to other central states, with only 43 per cent correctly identifying the concept. It is worth noting that Victoria is also the state with the lowest interest in international travel.
Russell suggests those planning to get away these winter holidays need to be across how exchange rates work or risk financial damage to their travel budget: “Overall, the concerning lack of knowledge about exchange rates and international transfer fees can have significant financial implications, including overspending, hidden costs, inaccurate budgeting, vulnerability to scams, and missed opportunities for savings. It is crucial for individuals, especially those who plan to travel soon, to educate themselves about exchange rates and transfer fees to make informed decisions and protect their financial interests now more than ever in a time of rising rates and living expenses.”
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