Are you in a difficult financial situation?

If you're having a tough time financially, here's how you can deal with financial stress and lighten the burden.


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If you find yourself in a tough financial position, 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 – Acknowledge you're in a difficult financial situation

The first step is to acknowledge that you're in a poor financial position. 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

Understanding why you're in this position is an important step to getting yourself out of it. Are you in a bad financial situation because of factors that are out of your control, or has some poor financial planning on your part led you to where you are. Here's some potential causes for being in a bad financial situation:

  • Illness or injury

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

  • Income or expenditure changes

Whether you're self-employed or on a salary, a change in income can be hard to deal with. For example, a sudden redundancy from your job or if your business closes down.

  • Unemployment

If you're unable to find paid work, or if you're underemployed, this is 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 cause you to fall into financially pressing situations.

Victims of domestic abuse

If you're a victim of domestic violence, read this guide to learn about the free help services available to you.

Step 3 – Seek help

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

  • Refinancing your debt
  • Reducing regular payments or extending the loan term
  • Delaying a payment date
  • Debt counselling
  • Financial counselling

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

Preventing financial stress

Once you're out of your bad financial situation, it's important to put some good money management habits into action to prevent it happening again.

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 unplanned situations lie those above. The following financial products can assist in creating a savings 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.

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.

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