The cost of living crisis is affecting most Australians.
As a financial planner with more than two decades of experience, I’ve never witnessed such widespread financial fear and anxiety. In 2023, 41 per cent of Australians described themselves as either poor, struggling to pay their bills, or just getting by, according to a major study from The Australian National University (ANU) and the Scanlon Foundation Research Institute.
The relentless increase in the cost of living has left no household untouched. But there is definitely hope (really!).
Here, I share five practical steps to help ease the financial burden, maintain your sanity, and even thrive in these tough times.
1. Shift Your Mindset
During challenging periods, our true strength emerges, leaving us with a profound sense of appreciation and resilience. Instead of seeing this as a crisis, view it as an opportunity to enhance your financial acumen, organise your life and eliminate wasteful habits.
This trying period might just unveil hidden blessings in disguise that improve your financial future and serve you with a valuable lifelong lesson.
2. Review Your Budget
Regardless of your financial situation, creating and regularly reviewing a budget is crucial.
It not only reveals financial leaks but also identifies opportunities for financial improvement, such as increasing savings, reducing debt or investing more for retirement. Establish a budget (if you haven’t already) and revisit it every time you get paid.
3. Reassess Reality
While having financial goals provides clarity and accountability, the cost-of-living crisis may impact your ability to achieve them.
Don’t lose hope; instead, reassess your goals. You can extend deadlines or adjust the savings target to suit your current situation.
4. Have a Side Hustle
Trimming expenses can only go so far, but the potential to earn more money is limitless. A side hustle can quickly bridge the gap and boost your financial goals. What’s great about side hustles is their flexibility; they can fit into your free time.
Data collected by Gumtree in 2017 revealed that the average Australian household is sitting on $5400 worth of unused items. So why not try selling some unwanted pieces from your home to inject some much-needed cash into your life.
5. Pause For Progress
In times of turmoil, it’s easy to lose perspective and forget your progress. Pause for a moment and practice gratitude for how far you’ve come since a year ago, two years ago or five years ago. Gratitude is scientifically proven to reduce toxic emotions such as resentment, anger, frustration and regret.
The practice is also proven to help you feel happiness and reduce depression. Review old statements, bank balances and portfolios to appreciate your financial journey and personal growth. Even improved motivation levels are a cause for celebration!
Every path towards achieving something special is filled with twists, turns and unexpected obstacles. Although it may feel like your financial journey is one step forward, three steps back sometimes, remember that nothing lasts forever and even this tight period will pass. Stay strong, stay resilient and keep moving forward with your head high.
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