Keep calm and carry on – tackling your financial stress

Written by Ronald Pratap

on November 14, 2018

With costs of living on the rise and wage growth stagnating, it’s not hard to see why Australian households are increasingly feeling the pinch when it comes to financial stress.i In fact, a recent Ubank survey revealed 59% of Aussies admit their current financial situation causes them stress or loss of sleep.ii 

Financial stress can be constant and at its worst crippling, but with a bit of teamwork, solid communication, and a dash of discipline you can get your finances under control and set the right foundations for your Financial future.

Here are some tips you can use in your household and everyday lives to improve your situation and well being when it comes to your finances. 

Communication

Often what aggravates our financial stress isn’t just the lack of funds but the way it affects us interpersonally. In this sense, families, couples and friends all need to work out healthy ways to communicate about cash. People have varying attitudes towards their finances and sometimes differences in approach are hard to reconcile. A good approach, as in most things in life, is to communicate openly and honestly. Perhaps it’s time to schedule a family meeting and talk about finances in a constructive, non-judgmental way, making sure everyone is aware of what the situation is, and ensuring you all have the same expectations. I find that in my meetings with a husband-wife or Mum and Dad- that not everyone agrees to the same views whether is come  down to investing in shares vs property, holidaying interstate or overseas, budgeting for eating out etc. All these situations should be put on the table and discussed as a team.

Learning to say no

We all have those friends who seem to always be doing things. Out at the movies. On another holiday. Having what seems like weekly glamorous dinners. And, if they are splashing it all over their socials, it’s hard not to feel envious as we are now in a Instagram age where image is not always what it seems. Your friends may want you to join in when they invite you along to something fancy. Of course, we all need to splurge every now and then. But you don’t have to keep up with the Joneses. Learning to say no is an important step towards financial freedom. But how do you do it?

Well an outright no can often be a bit blunt. Why not instead suggest an limiting the number of events you attend or looking at cheaper alternatives for the group whether it be a BBQ, activity or staying in for movie night. Most Importantly is stop comparing yourself to others and start doing you.

Crunching the numbers

Once you’ve figured out how to communicate about finances, it’s time to look at the numbers themselves. If you haven’t already, draw up a household budget and this can be as easy as jumping onto the moneysmart website and filling out their easy to use templates. Often people avoid these out of fear of appraising their expenditure or just because they see the task as too tedious. Luckily, there’s a plethora of online applications now which make the task simple and if you can stick to your budget, this will allow you to get to the bigger purchases your are looking forward to over time.

Look at your spending habits

In the age of direct debit, it’s easy to forget about certain things you’re paying for. If the money just leaves your account, especially if it’s not a large amount, it’s hard to believe it was even there in the first place. It won’t take long to review what you’re spending money on and where, and decide what’s really important. Review your budget every quarter, check your direct debits and ensure nothing is coming out of your account that you haven’t forgot to cancel.

Dial down your debt

With Australian household debt amongst the highest in the world it may be time to look at how you can work towards reducing your debt.iii There are multiple ways you can do this and it will depend on your individual circumstances but it’s worth doing your research or speaking to us. Don’t sweep it under the rug though, as working out a plan to reduce your debt could make a big difference not only to your bottom line but also your wellbeing.

Manage your stress

It’s important to remember that financial stress operates chemically the same way as other stressors, meaning to combat it all your usual tricks should still help. Make sure you’re exercising regularly, sleeping well, eating healthy, staying social, and taking time to be mindful. Sure, these practices won’t actually reduce your financial burden, but they will leave you in the right mind frame to take appropriate steps.

I started the business 2 years ago and in that time I have and am still dealing with a divorce and constantly dealing with regulatory and legislation changes in the industry which affects my business and running costs. My time is making sure I go to the gym everyday and also do some type of outdoor activity on the weekend. This has resulted in me losing about 12 kilos since the start of the year and ensures I not only invest in my business and future, but invest in myself.

While financial stress can be debilitating, you don’t have to suffer alone. We can help you get on top of your situation by making a practical plan going forward.

Don’t hesitate to call our office on 02 9188 1547 and remember we offer a wide variety of services throughout the Sydney Metropolitan areas including: Sydney CBD, Parramatta, Liverpool, Campbelltown, Oran Park and the wider Macarthur region.

 

 

https://www.rba.gov.au/publications/bulletin/2018/mar/ pdf/wage-growth-in-advanced-economies.pdf

ii https://www.ubank.com.au/newsfeed/ articles/2018/02/86-per-cent-of-australians-dont- know-their-monthly-expenses

iii http://www.abc.net.au/news/2018-01-18/household- debt-extremely-elevated-and-tipped-to-grow/9340880

Ronald Pratap

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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