Why everyone’s stressed about money (and what you can do)
If you're feeling the financial squeeze and wondering how to make ends meet, you’re definitely not alone. Let's break down what's going on and how you can manage that stress.
Why financial stress is a big deal
Financial stress hits when your money just isn’t stretching far enough to cover the basics. It’s that gut-wrenching feeling when paying rent or the mortgage seems impossible, and keeping up with living expenses feels like a constant battle. This stress can bring about serious worry, anxiety, and uncertainty.
Recent stats paint a pretty clear picture:
Source: Australian National University
What's causing all this money stress?
Financial stress hits when you can't meet your basic needs and obligations with your current financial resources. It might be a struggle to pay rent or mortgage and keep up with living expenses, leading to feelings of worry, anxiety, and uncertainty.
Why is financial stress so common?
There are plenty of reasons why your finances might feel like they’re spiraling:
Job loss: Losing your job can throw your entire financial plan out the window. According to the Australian Bureau of Statistics, the unemployment rate in Australia rose to 6.9% during the COVID-19 pandemic, significantly impacting financial stability for many Australians. (source: ABS)
Stacking up debt: Credit card bills, personal loans, or lingering student loans can pile up, making it tough to see a way out. A report from ASIC found that nearly 1 in 5 Australians are struggling to pay off credit card debt. (source: ASIC)
Cash flow hiccups: Freelancers and small business owners know this struggle all too well. Payments don’t always come in on time, leaving you in a tight spot. According to a survey by the Australian Small Business and Family Enterprise Ombudsman, 53% of small businesses report that late payments are affecting their cash flow. (source: ASBFEO)
Unexpected life events: Whether it’s an unexpected medical bill, car repairs, or family emergencies, these can hit your finances hard. The Australian Institute of Health and Welfare reports that in 2019-20, 1 in 5 Australians delayed or avoided accessing medical care due to cost. (source: AIHW)
Rising cost of living: Groceries, rent, utilities – everything seems to be getting more expensive. The Reserve Bank of Australia notes that inflation has been steadily increasing, with a notable rise in the Consumer Price Index (CPI) over recent years. (source: RBA)
Economic ups and downs: Inflation, interest rate hikes, and economic downturns can affect everyone’s financial stability. The COVID-19 pandemic has had a significant impact on the global economy, leading to financial stress for many Australians. (source: Treasury)
Major health issues: Health issues can drain your savings and increase stress. The Cancer Council of Australia states that the average out-of-pocket cost for cancer patients is around $5,000, which can be a significant burden (source: Cancer Council).
Natural disasters: Bushfires, floods, and other natural events can cause significant financial disruption. The Australian Red Cross highlights the financial impact of the 2019-2020 bushfire season, which saw many Australians facing substantial rebuilding costs. (source: Red Cross)
What you can do to manage financial stress
Create a budget. It sounds basic, but knowing exactly where your money’s going can help you find areas to cut back.
Seek advice. Sometimes it helps to get a fresh perspective. A financial adviser can offer tailored advice and help you make a solid plan.
Prioritise expenses. Focus on the essentials first – housing, food, utilities – and then see what’s left for other expenses.
Talk about it. Financial stress can be overwhelming. Sharing your worries with a friend or professional can ease the burden.
Take it one step at a time. Break down your situation into manageable parts. Once you’ve sorted your budget, look for ways to cut down on expenses. Maybe you can find a better deal on insurance or utilities, reconsider if you really need all those subscriptions, and hunt for grocery discounts.
Look after yourself. Doing things you enjoy can really help when you're dealing with financial stress. Spend time with loved ones, dive into your hobbies, or get outdoors. These activities don’t have to cost much and can help you feel better and think more clearly.
Financial stress is tough, but remember, you’re not alone. By taking steps to manage your money and seeking the right support, you can start to regain control and reduce the stress. If you’re struggling, reach out for help – there are plenty of resources and people ready to assist.