Make financial situation better

How to make your difficult financial circumstances better

Information verified correct on October 28th, 2016

Here's how you can deal with financial stress and lighten the burden.

If you find yourself in tough financial circumstances, don't torture yourself. You are not alone. Difficult financial situations can happen due to external factors like illness, or due to controllable factors like poor financial planning. If your finances are causing you stress, here are some steps you can take to fix it.

Step 1 – Determine if you are in a difficult financial situation

Your financial situation is classified as difficult when you, as an individual or a business, cannot make repayments you are responsible for. These responsibilities can include car payments, mortgages, credit card debt, loan debt, or even simpler things like being unable to buy food for yourself and your family.

Step 2 – Determine the main causes

  • Illness or injury

An unexpected illness or injury can cause chaos with your finances if you don't have emergency savings to draw on.

  • Income or expenditure changes

Whether you're self-employed or on a salary, a change in income can be hard to deal with.

  • Unemployment

If you lose your job, that's definitely a source of financial stress!

  • Death

If an income earner dies or if you're forced to take time off work for bereavement, finances often suffer.

  • Relationship changes

A change in your marital status, a bad break-up, or a family issue can you to fall into financially pressing situations.

  • Natural disaster

Although this is less common than many other causes of financial stress, it can cause major disruption.

Step 3 – Take the appropriate course of action

There are sone basic steps you can follow to reduce stress.

Create a buffer

Creating a financial buffer should be one of the first priorities on your financial planning list. Saving "rain day money" can help you cope with any of the situations above. The following financial products can assist in creating a buffer:

Stick to your budget

Many people set up a template for their budget and stick to it for a month or two before falling off the wagon. End result? Panic, pressure and inadequate savings. Follow our tips for setting a budget and sticking to it.

Pay off your debts

Start by tackling your smaller debts and the ones that attract the most interest. That will give you a sense of achievement and motivation to tackle the bigger debts.

Seek help

Most Australian banks have options to help individuals and businesses work through difficult financial situations. These support structures can include:

IMPORTANT: Free Financial Counselling

If you would like free financial counselling you can call the Financial Counsellors hotline on 1800 007 007. It is open from 9:30am to 4pm, Monday to Friday

Educate yourself

This is one of the most overlooked steps in dealing with difficult financial situations. Many people panic because of financial stress, get some form of help, and then find themselves back in the same mess months or years later.

Financial habits have to change and be formed into new ones and for this to happen, people need to educate themselves. This is the most powerful long-term solution to dealing with difficult financial situations.

Shirley Liu

Shirley is's publisher for banking and investments. She is currently studying a Masters in Commerce (Finance) and is the author of hundreds of articles. She is passionate about helping Aussies make an informed decision, save money and find the best deal for their needs.

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