It's that time again - the end of the financial year. During the week of the 30th June this year, personal finances will be on the minds of more Australians than in any other year in recent history. Financial stress is expected to impact large numbers around the country for the foreseeable future. If you’re someone who is likely to struggle financially, there are some steps you can take to reduce the stress, but let’s first take a look at some things that are causing financial pressure.
What is Causing Financial Pressure?
The pandemic and flooding events on the east coast of Australia have caused raw materials and food prices to increase. The global price for grain has increased 65% year-on-year in the last quarter according to the Australian Food and Grocery Council. The rising cost of aluminium is forcing up prices of canned foods, with fresh and canned foods also being impacted by the worldwide increased cost of fertilizer.
The dramatic rise in global oil prices is also contributing to the price of transporting food, but also the weekly cost of filling up on petrol for the family car. The Federal Government’s cut in fuel excise is due to be removed in September, so prices could increase even further.
All of this inflation means the Reserve Bank of Australia has moved to increase interest rates on mortgages for the first time in 11 years. More interest rate pain is tipped to continue in the second half of this year and into next year. Many mortgage holders are used to historically low rates of interest, so the increases may come as a shock to the bank account.
Wages are not keeping up with the increased cost of living, which will put many average Australian workers under financial stress. Making ends meet can be a constant source of stress that impacts people at home and work.
4 Tips to Handling Financial Stress and Boosting Mental Health
It’s easy to think you have no options available when you’re under considerable financial stress. If you’re on a fixed income with no option for increasing to keep pace with everyday living expenses, it’s easy to think there’s no hope for improving your situation. However, there are some things that you can do to decrease your stress levels and boost your mental health in doing so.
#1 Take Action on Spending
Many Australians will tackle the increased costs by reducing their spending where they can. Small luxury items like takeaway and restaurant meals may be trimmed and taking a long drive or a trip to the movies on the weekend may be deemed unnecessary expenditure. Taking out the little luxuries in life can be stressful but sticking to a budget can also be empowering knowing that you’re taking action on the finance front.
#2 Seek Help if Your Relationship is Suffering
Financial stress can put any relationship under pressure. Disagreement around finances is one of the major causes of relationship breakdown. If you feel the family budget is causing friction between you and your partner, seek help early. Make an appointment with a psychologist at your EAP provider or Relationships Australia to help work through your differences.
#3 Consider Debt Assistance
If you feel as though your finances are spiralling out of control and you can no longer manage the debt collector notices, seek help from a financial professional at National Debt Helpline on 1800 007 007. Counsellors at the free service can assist by making contact with your creditors and setting up payment plans so that most of the threatening letters and phone calls stop.
If completing your EOFY tax return is partly to blame for the stress, contact a tax professional for help or speak to the Australian Taxation Office.
#4 Try Activities to Help Offset Stress
When the human body is under significant stress it can take a toll on your mental and physical health. The stress makes it difficult to concentrate on other parts of life, can cause anxiety and depression, reduces our immune system and can cause chronic disease and illness.
There are plenty of measures you can take to reduce the level of stress you’re feeling. Exercising helps you clear the mind and release endorphins in the brain to relax the muscles and relieve tension, while hobbies and leisure activities can help you incorporate some additional fun and enjoyment into your days. Mindfulness and meditation exercises, or even yoga, can help with keeping calm and improving your sleep. Otherwise, something as simple as spending some more time with family or friends can help.
If your financial situation is causing stress, or you're struggling with your mental health, ask your employer if you have access to an Employee Assistance Program so that you can speak with a registered psychologist. Call 1800 258 487 or contact us online for more information.
Please note that PeopleSense are not financial advisors, therefore the information in this article is intended to act as general and not to be taken as financial advice.