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How to manage financial stress and anxiety


Financial stress and anxiety can permeate every area of your life – from your relationships and parenting, to work performance and sleep.  It’s also one of the most common causes of marriage breakdown. But as bad as it might seem at times, know that there are things you can do to improve your financial situation and manage financial stress and anxiety.  Read on to find some ways you can take control of your financial situation, before it takes control of you.

Know where your money is going

While it’s tempting to stick your head in the sand when it comes to dealing with your finances, it’s essential you get your head around the situation. Until you sit down and work out where you’re leaking money, nothing will change.

Review your finances so you know what’s coming in, as well as how much you’re spending in the different areas of your life.  That way, you have clear base to start from. If you don’t already have a budget, Financial Spectrum has online budgeting tools to help.

Don’t ignore those small, seemingly innocuous purchases, like takeaway coffee and Uber Eats.  According to financial commentator David Bach’s theory, The Latte Factor, they really do add up and can make a huge difference to your financial situation.

Go through your latest credit card statement and take note of all your automatic expenses too.  Look for subscriptions, gym memberships, streaming app services, online games or donations to charity.  You’ll likely get a shock to find how much you’re actually paying each month.

Once you have a clear view of where your money is going, you or a financial advisor can create a plan so you can reduce stress and get to where you want to be.

Reduce your expenses

The next step is to reduce expenses where you can.  If you’re spending on items that you don’t need, use or value, cut them out.  If you’re at crisis point, strip your budget to include essentials only.  This should be food, rent/ mortgage, essential healthcare, utilities, car expenses, loan repayments and insurances.

While this exercise may feel daunting, the improvement to your mental health will be worth it.  It isn’t forever and you can always make changes again when your financial situation improves.

If you have savings from this exercise, it’s a good idea to direct them into an emergency fund.

Build an emergency fund

Sudden unexpected expenses are a reality of life, but they’re also the biggest cause of current financial stress. Covid-19 has taught many of us that having an emergency find is more important than ever.

Your emergency account is separate to your savings account – it’s a pot of cash specifically set aside as a contingency fund for when the unexpected happens.  A stash of even $5,000 could keep you going for several weeks if you are made redundant or hit with unexpected expenses and will greatly reduce financial stress.  Plus it reduces the risk of opting for a high-interest borrowing options, making the situation even worse.

If you don’t have cash to set aside, think of some creative ways to raise the funds. Do you have any skills such as writing, graphic design or handyman services that you could offer through sites such as AirTasker or UpWork?  Could you declutter and sell household items you no longer need, use or value?

Set goals for what you want to achieve

Living without goals is like taking a road trip without a satnav –  you can’t expect to get to where you’re going easily. It can be hard to stay on track and reduce discretionary spending when you don’t know what you’re working towards. But by setting clear, measurable goals, you’ll feel in control, stay motivated and get to where you want to be faster.

Having clear goals also makes it easier to create a solid plan for your future.  Having a financial plan gives you control and confidence, contributing to financial harmony.  You know that if you stick to it, you’ll achieve what you want out of life. Have you thought about when you want to retire? Maybe you want to buy your first home, an investment property or you’d like to plan for having a baby?  All of these things require money so being clear on what you want in your life will enable you to manage your finances to achieve them.

Of course, sometimes life doesn’t always go the way you want it to.  If you can make changes to your circumstances so that you can stick to your plan through life’s ups and downs, you’ll reach your goals faster.  If your situation has changed to the point where your plan is no longer manageable, speak with a financial advisor and have it adjusted accordingly.  You may find that with some small changes and a little flexibility, you’ll still be able to get to where you want to be.

Recruit an accountability buddy

Sometimes, all it takes is sitting down with someone you know and trust to help you set your financial goals, get you back on track and hold you accountable. Enter: an accountability buddy.

Your accountability buddy might be in a similar financial situation as you, or perhaps they’ve come out the other side and want to cheer you on.  Whoever it is, having someone there to talk with and navigate you through your financial stresses can make all the difference.

Get professional financial advice

You might think you can’t afford to get financial advice. But if you are under financial stress, you may not be able to afford not to. If you had a dental issue, you’d see a dentist. If your car had issues, you’d go to a mechanic.  When you’re facing financial issues, see a financial advisor.

There is no shame in seeking help.  Whenever we are in the thick of a problem, it’s hard to find our own way out.  A financial advisor job is to help you navigate life’s ups and downs and help you to improve your financial situation.  They’re likely to find ways to help that you may not have considered or even know about.

It’s better to seek help sooner rather than later before your problems get bigger.  Taking action will help you to feel more in control of your situation and help your mental health too.

Further help

If you need help but cannot afford to pay for it, there are free services available. Please know that you’re never in this alone.  With the right help, there is ALWAYS a solution to the financial problems you are facing.

For emotional crisis support contact Lifeline on 13 11 14 24 hours per day.

For domestic violence support 1800RESPECT also offers 24 hour phone support.

If you’re worried about paying your debts, the National Debt Helpline is a free service with specifically trained financial counsellors that will work with you to find solutions.  They can help with negotiating debt, rent and bills and can refer on to additional services.

If you’ve had a sudden change to your financial situation, check you’re receiving all you’re entitled to from Centerlink and via the NSW payment finder.  Centerlink can also offer emergency payments in some circumstances, which could be helpful to avoid a high-interest loan.

If you can’t pay your mortgage, rent or other expenses, speak to your lender, landlord or utility provider about a payment plan.

Money Smart also has a range of tools, resources and contacts to help you through this difficult time.


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