Worrying about money can affect much more than your bank balance. Financial stress can impact your mental wellbeing, physical health, relationships and overall quality of life, however you don’t need to manage this on your own, you can manage financial stress and get help..
For many Australians, keeping up with household bills and managing financial pressures is a significant source of stress. Research from Compare the Market found that 61% of Australians say financial pressures and paying household bills are their biggest source of stress.
Financial stress and pressure can happen for many reasons. Rising living costs, job loss, ongoing debt, gambling habits, hiding financial situation from spouse, difficulty finding employment, illness or injury can all make it harder to stay on top of your finances.
If money worries are weighing on you, taking a few practical steps can help you regain a sense of control.
1. Create a Budget You Can Stick To
A budget doesn’t need to be complicated.
The first step is understanding where your money is coming from and where it’s going. Reviewing your income and expenses can help you identify unnecessary spending, prioritise important bills and find opportunities to save.
It can also help you plan for both short-term expenses and longer-term financial goals.
There are plenty of budgeting tools and apps available that can make the process easier. Sometimes, simply having all your finances in one place can make your financial situation feel more manageable.
The key is creating a budget that reflects your actual lifestyle and that you can realistically maintain. If it isn’t realistic, you ain’t going to stick to it and chances are you will go back to old habits.
2. Focus on Tackling High-Interest Debt
Debt can be a major source of financial stress, particularly when you’re paying high interest on credit cards, personal loans or other forms of debt.
Where possible, consider paying more than the minimum repayment and prioritise debts with the highest interest rates and smallest amounts. Reducing high-interest debt can help lower the amount of interest you pay over time and free up more of your income for other priorities.
If you have multiple debts, you may also want to investigate whether consolidating them could make repayments easier or reduce the overall interest you’re paying as there will be other ongoing account keeping and administration fees attached.
However, debt consolidation isn’t right for everyone, so it’s important to consider the costs, interest rates and terms before making a decision or speak with a debt specialist to understand your options and how each decision may affect you. You don’t need to manage financial stress yourself, you can ask for help.
3. Build an Emergency Fund
Unexpected expenses are part of life.
A major car repair, medical expense, home repair or sudden loss of employment can put significant pressure on your finances if you don’t have savings available.
An emergency fund can provide a financial buffer and help you manage unexpected costs without relying on credit or taking on additional debt in desperate circumstances.
A commonly suggested goal is to have enough savings to cover three to six months of essential living expenses. However, don’t let that figure discourage you from starting.
Even putting aside a small amount regularly can make a difference. The important thing is to start building a financial safety net that works for your circumstances. Put it into an account you can’t access by card or can’t see, that why it’s not front of mind and there when you need it.
4. Protect Your Income
One of the most important assets you have may not be something you can see or put in a bank account — your ability to earn an income.
Your income helps pay your mortgage or rent, household bills, debts, children’s expenses and everyday living costs while also funding all the other insurances on assets you can always get back in the future. It also allows you to save and work towards your longer-term financial goals.
If illness or injury prevents you from working, your financial commitments don’t necessarily stop as you still have your monthly debt obligations, mortgage, rent, ongoing living expenses and now medical expenses.
Depending on your circumstances and the policy you hold, Income Protection insurance may provide a regular monthly benefit of up to 75% of your gross income if you’re unable to work due to illness or injury, without relying on family members to help you or loan you funds.
Total and Permanent Disability (TPD) insurance may provide a lump-sum payment if you become totally and permanently disabled and meet the relevant policy definition.
These types of insurance can form an important part of a broader financial protection strategy, helping you and your family manage expenses and financial commitments if the unexpected happens.
It’s important to understand that insurance policies differ, and the amount and type of cover that’s appropriate will depend on your individual circumstances. If you require a quote, please reach out to our office via the callback link on the side of this page.
5. Don’t Be Afraid to Ask for Help
When you’re feeling financially overwhelmed and don’t know how to handle financial stress, it can be tempting to avoid looking at the problem altogether.
But taking action — even small steps — can help you feel more in control.
A financial adviser can help you understand your current financial position, identify priorities and develop a strategy that works towards your goals. This may include budgeting, managing debt, building savings, protecting your income and planning for the future.
You don’t need to have everything figured out before seeking advice. Sometimes, having someone help you understand your options is the first step towards feeling more confident about your finances.
Take Control of Your Financial Future
Financial stress can feel overwhelming, but you don’t have to solve everything at once.
Start by understanding your spending, focus on your most important financial priorities, build an emergency buffer where possible and consider how you would manage financially if you were unable to work.
The right financial strategy isn’t about being perfect with your money. It’s about having a plan that gives you greater clarity, confidence and financial resilience.
If you’re feeling uncertain about your finances and can’t manage financial stress yourself or want to put a plan in place for your future, get in touch to discuss how financial advice may be able to help by scheduling a callback or emailing our office via the contact page.
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The information in this website and the links has been prepared for general information purposes only by our office and does not take into account your personal objectives, financial situation or needs. It is not intended to provide commercial, financial, investment, accounting, tax, personal or legal advice. You should, before you make any decision regarding any information, strategies, or products mentioned on this website, consult a professional financial advisor to consider whether it is suitable and appropriate for you and your personal needs and circumstances.
Principal Financial Planner at RP Wealth Management | Financial Planning l SMSF I Insurance l Property Advisory. Our purpose is to provide our clients with sound advice and direction to assist with their financial affairs and help them make the best choices in achieving what is important to them.
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