During 2020 workers in Australia who experienced mental health conditions increased by 17.6% to 59.5% (SuperFriend 2021) What part of this worrying statistic can be attributed to financial stress?

As we near the end of 2021, I don’t think I would be alone in waving an enthusiastic goodbye to one of the toughest years many of us have had to live through. Whilst support came in the form of family, friends, community and government, wellbeing was an issue that was frequently touched upon in the media both mental, physical and financial. Small businesses closed, redundancies were made and money lost which has had a collective toll on all of us and never has it been more important to check in with our friends and family and ask after their wellbeing.

However, there have been some positives to draw on. Australians are saving more than ever before. The inability to travel abroad lent itself to people accumulating cash that would have otherwise been spent on travelling and directing it towards savings, repaying debt or trips to Bunnings as they finally had time for that DIY project. It was recently reported that credit card debt has fallen to its lowest level in 18 years. The Reserve Bank of Australia disclosed the national credit card debt in September 2021 to be $17.68 billion – the lowest seen since November 2003. This welcome news will go some way to relieve financial stress in families that are struggling with paying expenses, bills, mortgages and personal debt positions.

As we move forward, it is evident that personal finances are being examined closer than ever before. Financial wellbeing is different from financial wealth and recognising that financial wellness forms a vital part of our overall wellness alongside mental and physical is essential. It’s time to take steps to alleviate the strain and restore our financial wellness.

In progressing towards returning to a “normal” life as we once knew it, there are some steps we can take to make sure we are looking after the dollars that look after us:

We spend a large portion of our time at work, so it is imperative that you are spending that time doing something you enjoy. It is not all about the money, employees are now valuing flexible working arrangements, time off for charity projects, free gym membership etc.  The great resignation is coming as the ‘work from home’ shake up has allowed employees to revaluate what is important to them and how they want to spend their working hours. Earning your income by doing something that is meaningful and valuable to you is just as important as the money you earn.

Uncertainty around finances comes from not knowing the numbers.   Good money management strategies such as having ‘purpose’ accounts allows you to maintain control and actively manage your cashflow – know what you have coming in versus your expenses each month and only spend within that amount. Direct surplus cash towards goals that you may have such as paying down debt or growing wealth. Knowing how much you can spend and afford, eliminates guess work giving you peace of mind and security that you can afford your lifestyle and what your financial obligations would be if your income was to unexpectedly change.

In any area of your life, an important factor that makes us humans happy, is progress. Progress in relationships, progress in your career, progress in building your wealth. Tracking and confirming you are making financial progress will lead to a positive relationship with your money and if you are not making progress, highlights the areas which need attention. Knowing that your money is working for you and you are making financial progress, will identify goals to work for and help you achieve satisfaction, that your finances are moving in the right direction.

Decisions made in fear are rarely the ones that produce the best outcome. Giving yourself a financial safety net is an essential piece of financial wellness – knowing you have financial support available should something unplanned happen which affects your finances. Having an emergency fund, buffer fund or protection via insurances are all strategies to give you comfort that you have a financial safety net in place should you ever need to rely on it.

So as we draw closer to the end of the year, it is beneficial to review how your finances affected your overall wellness in the past 12 months. What areas do you need to focus on to ensure that, as we move towards a ‘new normal’, you are best placed to achieve financial wellness for the year ahead and beyond.

 

Jodi Escudier is a financial adviser who helps women and families identify and reach financial goals through positive strategic advice.   Over the last 8 years Jodi has worked together with clients to develop a pathway to a better financial future and secure wealth for themselves both now and as they navigate life’s everchanging demands.

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