I have just read this recent report with new analysis from The Australian National University (ANU). Did you know that one out of every four Australians are facing some serious financial stress? This is the highest level of financial stress we’ve seen in Australia during the whole COVID-19 pandemic and almost as high as it was before the pandemic even started.
Now, when we look at income brackets, it’s not surprising that those in the lowest income bracket are really feeling the pinch understandably, with more than half of them saying they’re having a tough time making ends meet with their current earnings. On the flip side, in Australia’s highest income bracket, only a mere five percent are experiencing financial difficulties.
The ANU survey, which talked to nearly 3,500 adults, also found something quite surprising. Australians are actually working more hours on average compared to before the pandemic hit. You’d think that would mean more money in people’s pockets, right? Well, not quite. Despite putting in more hours, real incomes are going down.
One of the study’s authors, said this paints a clear picture of the challenges the Federal Government is facing as it tries to implement its “wellbeing budget”.
It further goes on to report that even though Australians are putting in more hours, they’re finding that what they earn doesn’t stretch as far due to rising inflation and living costs. This is causing increasing financial stress.
And while most of us have noticed that prices have been climbing this survey confirms that you’re not alone, with 48% of Australians thinking that prices have gone up ‘a lot more’ during the pandemic and since.
What’s even more concerning is that a growing number of Australians see these price hikes as a significant problem. In January 2022, only 37.4% thought rising prices were a very big issue. By October 2022, that number had jumped to 56.9%.
The report summarises that the rising cost of living is taking a toll on many Australians understandably, even as our economy and society open up after lockdowns. And while the government works on its first budget to improve the wellbeing of all Australians, they should really be focusing on the cost of living and financial stress as a top priority (which I wholeheartedly agree with).
So while this report is making recommendations for what the Government should do, let’s look at what we can all do as individuals – as we got pretty good at checking in on our friends and family during Covid. So why not check in with a mate and see how they are going with their financial stress. I know talking about money is a taboo subject for many people, but let’s try and have the conversation anyway.
Here’s some tips on starting the conversation:
Firstly I am not an expert on this, this is just based on my 35 years of talking to clients and people in general. As talking about money can be stressful, start by finding a relaxed environment to have it in. I used to also share my own negative financial experiences first and hopefully it leads them to want to talk, especially if it’s a friend. If not, you can gently inquire about their financial well-being and how they are going, and just listen. So few people ask others how they are and while you may not be able to provide solutions, being a good listener with no judgement can make such a difference sometimes.
My top three tips to anyone struggling with financial stress:
- Budgeting and Financial Planning: You need to know where the money is going each month. Create a budget, start with just one month, to understand where your money is going. Finding ways to save money is always the first step.
- Emergency Fund: Save three to six months’ worth of living expenses in an emergency fund for peace of mind.
- Seek Professional Advice: Consult a financial adviser or coach when financial stress is overwhelming to get help with managing debt and creating a financial plan. There are some amazing government and volunteer services as well available if a real struggle.
Article by Marc Bineham – Money coach, speaker and award-winning author of The Money Sandwich