Australians are relying on personal credit to get through the COVID-19 pandemic according to survey results released by a financial institution.
Severe and moderate levels of financial stress are impacting 1.8 million Australian workers, with nearly half feeling financially stressed for an average of six and a half years or more. One in seven were unable to pay one or more bills over the last 12 months, while 23 per cent feared they would not be able to raise $2,000 in an emergency. Employees that were negatively impacted by the COVID-19 pandemic were more likely to experience financial stress.
It’s clear that those whose working arrangements have been directly impacted by COVID are relying more on credit cards and personal loans to meet day-to-day needs. Aussies are feeling the pinch with Australians on a higher salary still experiencing a high level of financial stress.
What to do if you’re experiencing financial stress
Seven tips for Aussies who are battling financial stress.
- Take action – Utilise online resources and education programs provided by your employer to improve your understanding of key financial drivers, including superannuation, debt and cash-flow management, insurance and investment principles.
- Set goals and put a plan in place to achieve them – Connecting finances with goals helps us engage with our finances, and then having a plan to achieve these goals can significantly ease stress.
- Create a budget that works for you – Writing up a budget may take an afternoon out of your diary, but it will help you more easily identify where there’s room for improvement. Then use one of the many budgeting apps freely available to track progress.
- Consider rolling your debts into one – Rolling multiple debts into a single loan can reduce fees and interest. It also provides greater visibility and control over your finances.
- Set aside some emergency cash – An emergency resource of funds could give you peace of mind and reduce the need to apply for high-interest borrowing options should you be faced with an unexpected expense or new circumstances.
- See if you can get a better deal with your providers – You more than likely have several product and service providers, and savings can be made by switching providers, which over time can amount to considerable benefits.
- Don’t be afraid to seek financial assistance – If you are struggling to make repayments, you may be able to seek assistance from your providers by claiming financial hardship. All providers must consider reasonable requests to change their terms in instances where you may be suffering genuine financial difficulties. In addition, you can talk to a financial counsellor
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Article reproduced from Nest Egg by Cameron Micallef