Knowledge Centre

Are You Finding Yourself in Financial Difficulty?

8/8/2023

Financial difficulty is a common challenge that many individuals face at some point in their lives. Whether it’s due to unexpected expenses, job loss, mounting debt, poor financial habits, or – as is becoming all too common in Australia with high inflation and skyrocketing interest rates – due to cost-of-living increases, finding yourself in such a situation can be overwhelming and stressful. However, it’s important to remember that you are not alone, and there are steps you can take to regain control of your finances and pave the way towards a brighter financial future.

Recognising the signs

The first step in addressing financial difficulty is to recognise the signs. Are you struggling to pay your bills on time? Are you relying on credit cards, short-term loans, or buy-now-pay-later (BNPL) facilities to cover basic expenses? Do you constantly feel stressed about money? These are all red flags that indicate you may be facing financial hardship. Acknowledging the situation is crucial to begin the journey towards financial recovery.

Assessing your finances

Once you’ve recognised the signs, the next step is to assess your financial situation. Start by listing all your sources of income and all of your expenses. This will give you a clear picture of your cash flow and where your money is going. Identify areas where you can cut back on expenses and create a budget that aligns with your income. Consider seeking professional help, such as a financial adviser or credit counsellor, who can provide guidance tailored to your specific circumstances.

Taking action

To overcome financial difficulty, it’s essential to take proactive steps. Here are some actions you can consider:

1. Reduce Expenses: Cut back on non-essential expenses, negotiate bills, and find ways to save money on everyday items.
2. Increase Income: Explore additional income streams, such as taking up a side job or freelancing, to supplement your primary income.
3. Prioritise Debt Repayment: Develop a debt repayment strategy by prioritising high-interest debts (especially credit cards and BNPL facilities) and consider debt consolidation options.
4. Seek Financial Assistance: Research government programs, community resources, or charitable organisations that may provide financial assistance or support during difficult times.
5. Improve Financial Literacy: Educate yourself about personal finance topics, including budgeting, saving, and investing, to make informed decisions and develop healthy financial habits.
6. Establish an Emergency Fund: Start saving for emergencies to avoid relying on credit or loans during unexpected situations.

Maintaining a Positive Mindset

Recovering from financial difficulty takes time and perseverance. It’s crucial to maintain a positive mindset throughout the process. Celebrate small victories, stay motivated, and remember that every step forward is a step towards financial stability and freedom.

Seek Support

Remember, you don’t have to navigate through financial difficulty alone. Reach out to trusted friends, family, or support groups for emotional support and guidance. Professional financial advisers can also provide valuable insights and help you develop a tailored plan to overcome your specific challenges.

And if you are having issues with your home loan, The Loan Company’s professional team of mortgage brokers are always available to help you in any way they can.

Conclusion

Finding yourself in financial difficulty is undoubtedly stressful, but it’s important to remember that it’s a temporary situation that can be overcome with determination and a strategic approach. By recognising the signs, assessing your finances, taking action, and seeking support, you can regain control of your financial well-being and pave the way towards a more stable and prosperous future. Remember, financial difficulties do not define you, but how you overcome them can shape your financial journey ahead.

In Australia, you can call the National Debt Helpline on 1800 007 007 and ask to be referred to your closest specialist financial counsellor service.