Financial Stress: Are you suffering?

Close to one in three Aussies are feeling the financial pinch, with money worries leading to sleep loss, relationship conflicts, isolation, and a wide range of further problems.

These were the findings of the inaugural Financial Stress Index, compiled by the global research firm CoreData on behalf of Financial Mindfulness, which in 2017 indicated financial stress is not solely the purview of low income households.¹

This Financial Stress Index revealed that of financially stressed Aussies, more than two thirds felt that their money worries led to fear, anxiety, or depression. More than 60% felt their physical health was affected by financial stress, and about three quarters said they had argued about money with their partner or family.

What constitutes financial stress?

According to the ABS, there are two indicators of financial stress – missing out experiences, and financial stress experiences.²

A missing out experience might include not being able to afford a night out, or a week-long holiday each year, or recreational activities. A financial stress experience might mean being unable to pay bills on time, or having to seek assistance from friends, family, or welfare support groups.

So how can you escape financial stress?

1. Create a budget. Writing down what you earn, owe and spend can help you create a workable budget, and let you identify areas where you could be saving.

2.Save a little money regularly. Even a small amount of cash deposited on a frequent basis goes a long way towards your savings goals. Continually achieving this small goal can give you confidence to continue upwards. In fact, 41% of Aussies say they save just a little at a time.³

3.Pay cash and avoid credit cards. While they may seem handy, credit cards often cost you dearly as they typically charge high interest rates on top of the amount you’ve already taken out.

4.Put some emergency cash aside. This will be a godsend the next time you bust your phone or your fridge goes cactus. Plus, having an emergency fund means you won’t have to rely on high interest borrowing options.

5.Talk money with your partner. One in two Aussie couples admit to arguing about money, so if you haven’t already, sit down and make sure you’re on the same page. Ensure both of you are happy about your financial goals.

6.Call other providers. You probably have several product and service providers, and each could be costing you more than it should. If you changed from the highest price energy plan to the most competitive on the market, you could save more than a grand annually, on ergey alone!⁵

7.Consider your plan B. Whether it’s life insurance, income protection, or contents insurance to cover lost, damaged or stolen items, there are a range of safety nets that could help in the event of the unexpected.

8.Be mindful of your retirement. The government’s Age Pension alone is unlikely to be able to cover a comfortable or even modest lifestyle in retirement, so putting a little extra into your super could reduce the potential for further financial stress later on.

Where can you go for help?

If you or someone you know are suffering from financial stress, there is always help and information available. If you need assistance with any of these problems, feel free to contact us to discuss your personal circumstances, and ensure you’re on top of your money situation. Alternatively, you can visit the beyondblue website or phone Lifeline on 131 114.

1.CoreData / Financial Mindfulness Financial Stress Index – 2017full press release

2. ABS – Household Expenditure Survey, Australia: Summary of Results, 2015-163.

3.ASIC’s MoneySmart – How Australians Save Money table 1

4. Finder – Heated conversations: 1 in 2 Aussie couples argue about finances

5. Mozo: Sick of high energy bills? Aussies willing to change providers could be saving over $1,000 a year

6. The ASFA Retirement Standard – June quarter 2017

7Wealth Pty Ltd ABN 44 609 210 246, is an Authorised Representative of AMP Financial Planning Pty Limited ABN 89 051 208 327 Australian Financial Services Licence 232706 and Australian Credit Licence 232706
This blog contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. If you decide to purchase or vary a financial product, your financial adviser, and other companies within the AMP Group may receive fees and other benefits. The fees will be a dollar amount and/ or a percentage of either the premium you pay or the value of your investment. Please contact us if you want more information.