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5 Simple Ways to Reduce Financial Stress

28 Jun 2018

Experiencing stress from time to time is normal and something that we all experience in our lifetime. The common triggers are usually work or relationships, but what about financial stress? Last year, 56% of Australian adults said they had felt some level of financial stress, and one in eight (12.6%) reported experiencing severe or high financial stress*. That’s a lot of worry over money!

We’ve put together five simple ways that can help you reduce your financial stress (and none of them involve winning the lottery)…

1. Communicate with your partner

Would you describe yourself as a spender or a saver? Do you like to pay bills early or right on the due date? What about your partner? If you don’t know the answers to these types of questions, it’s very likely you will find yourselves, like most couples, arguing about money.

You most likely developed your own approach to money when you were growing up, learning from the adults around you. Your financial ideals shape your behaviour later in life and can explain how people react differently when it comes to money.

It may not be the first thing you want to do after a day at work, but it is important to sit down with your partner and have an honest conversation about your financial ideals. You don’t need to agree on everything, and you probably won’t, but talking it out will help you see your financial situation through each other’s eyes. Once you understand your attitudes towards money, it makes it easier to come to a compromise you can both work with.

2. Set some (joint) goals

When stress takes a hold, it can be difficult to remain positive. Having a goal in sight is one way to keep you focused on what you want to achieve.  

Take some time to think about what you would like to achieve in the next year, five years and beyond. It might be renovating your home, taking a family holiday overseas or maybe planning for a baby. Each of these things have a financial impact, but they are all achievable if you have a plan in place.

Also, make sure you and your partner agree on the goals. There may be no point saving for a boat if your partner wants to downsize and move to the country.

3. Utilise technology

There are some apps and online tools out there to help you manage your money and stay on top of your finances, and you don’t have to be a tech-expert to make them work for you.

You can start by determining where your biggest money headaches come from. Do you struggle to pay bills on time? Then set up auto-pay or direct debit through online banking. Are you losing track of how much you spend each week? Download an expense tracker that can show you where money is going. Could you be saving more? There are some great tools out there that can round up your spare change and put it aside into a high-interest savings account without you even having to lift a finger.

Just like a fitness app or personal trainer, financial tools help track your progress and keep you motivated.

4. Protect what’s important

Do you worry about what would happen to you and your family if you suddenly fell ill or your partner was injured? How you would cope if you had to take time off work to care for your child? Even if you don’t like to think about it, planning for life’s little curve-balls is a smart way to give you peace of mind so you can sleep through the night.

Insurance is a simple way to ensure your family is financially protected from any unexpected events. There are a range of products available in the market that offer financial protection for different types of events and allow you to maintain a safety net over your family’s current lifestyle.  

5. Take small steps towards minimising stress

It’s easy to become overwhelmed these days, with the overload of information available to us about managing our finances. We’re constantly bombarded with messages that advise us to consolidate our super, refinance our home loans, or start planning for retirement. It’s no wonder financial stress is on the rise.

Take it step by step and set yourself one financial task to do each month, this could be tracking down your lost super, creating a (realistic) budget or identifying any unnecessary fees. As you check off your financial to-do list, you’ll feel a sense of financial control return and your stress will begin to melt away.

*http://www.csi.edu.au/financialresilience/ 2017 Financial Resilience in Australia Report, Centre for Social Impact