If you’ve ever googled saving tips, you’ll know that the most popular suggestions are to stop buying coffee every day, start making your lunch and to sell your old clothes and furniture online rather than donating them or throwing them out.
There is no doubt that these are good tips but to be honest, if you are still heading to the pub three times a week, smoking and gambling, no amount of instant coffee is going to help break this cycle.
In fact, with some studies reporting that as many as 46% of Australians are living paycheck to paycheck, it is clear that these so called “tips” aren’t the secret to retiring early. This data also suggests that it isn’t just those on low incomes that struggle keeping to their weekly budgets, illustrating that this issue relates more to a lack of access to financial knowledge and lifestyle than to income level.
Everyone knows that waiting for payday is stressful and that it doesn’t feel great when your card declines at the servo. But how does this stress impact you beyond having to sheepishly ask your mate to lend you a tenner for petrol?
Financial stress is so unique because as a society we often shroud money in mystery and it has become somewhat of a taboo to talk openly with each other about money issues. Stress can be compounded further by the pressure to keep up with those around us despite there not being a way to measure our own financial position against our peers.
Furthermore, living week to week creates a constant sense of doom about when your luck might run out and unfortunately it often ends up being a catastrophe like a particularly expensive car service or a sudden move that spends you spiralling.
Finding yourself in a situation like this with no savings can often force you to make decisions like getting a payday loan or using credit cards irresponsibly, decisions that in the long run will do nothing to help your financial position because you’ll spend years paying off things that you may have been able to paid for upfront at the time.
So, how do you even start to break the week to week cycle and avoid being caught out in an emergency?
The most important step is to gain a basic understanding of your financial position, which you can do by asking yourself the following questions.
How much do you earn and what are your essential expenses (e.g. food and rent)?
How much is reasonable amount to save each pay cycle when you consider your income and expenses?
Do you have any debt and what it the fastest way to pay it off?
Are you filing your taxes correctly?
If you don’t know the answer to any of these questions, it is important to speak to someone you trust and seek out expert help to you determine the correct answers.
Once you are satisfied that this information is accurate you will find yourself in a position where you able to start building up your savings account and sticking to a budget, which comes with its own challenges but is the best place to start.
If you believe that you might be struggling with financial stress our TIACS psychologists are available to provide free professional mental health support via text or call.