Higher cost of living, global volatility, and the ongoing economic impacts of Covid-19 have started 2022 off with a bang. And for almost half of Australians, our savings and financial wellbeing have taken a hit because of it.
New data from NAB shows that more than 40% of all surveyed adults reported a decline in their savings in the past three months.
The NAB Australian Wellbeing Survey also found that more than one in 10 Australians do not have $2,000 for an emergency. Social organisations as well as the Barefoot Investor use this $2,000 benchmark as a measure for financial health.
And if you’re feeling the pinch of financial stress at the moment, you’re not alone with one in three people reporting “high” levels of stress.
Three quarters of respondents are trying to save, but report being challenged by debt, repayments, bills, and everyday spending. And a further 20% of respondents have reported missing a bill or loan payment in the past three months.
The NAB Wellbeing Survey also found that of all the Australian states and territories, NSW, the ACT and Tasmania came out on top in terms of financial stress levels.
When you consider that only last year more than half of Tasmanian homeowners (55%) were facing mortgage stress, it’s no wonder the Apple Isle has topped the list with states with larger populations.
Your options if you’re facing high financial stress
NAB Group Executive Personal Banking, Rachel Slade, said: “While it was positive Australians’ wellbeing had returned to pre-pandemic levels, missing a bill or any loan payments was understandably stressful for many people.”
“Australians want to save but actually doing it is another thing because of household expenses and everyday activities,” Ms Slade said.
“We encourage customers to look at their income and expenses. Customers can do a budget and then work out how much they’d need in an emergency fund, so they’re not caught out with a surprise bill or an unexpected major purchase.”
Some practical steps you may want to consider if you’re currently experiencing financial stress may include:
- Track your spending carefully
Take time to audit your personal spending and find areas where you can reduce your expenses. Go through the last three months of your bank accounts and categorise your spending. You may think you know how much you’re putting to subscriptions like Netflix and the gym each month, but it could be significantly higher.
- Make a budget and stick to it
Now you know where your money is going, you can consider setting a new budget and working to stick to it. This may mean trying to reduce your grocery spending or cutting out frivolous spending like takeaway food and second daily coffees. Whatever you need to do to pay your bills and utilities on time may be worth considering cutting out.
- Boost your income
Setting a budget and sticking to it can only go so far as you can only cut down so many expenses. Increasing your income is one of the best ways to reduce your financial stress. While this may not be a practical step for a lot of Australians, particularly those working longer contact hours or shift work, it’s worth considering for some. This could include:
- Freelancing in your spare time
- Asking your manager for a pay rise
- Considering a new job change to give yourself a pay rise
- Selling some of your possessions on GumTree or Facebook Marketplace
- Trying to make money from your hobbies
Struggling with mortgage stress (paying more than 30% of your income towards your mortgage)? Use RateCity’s Mortgage Stress Calculator to assess your stress levels and discover some tips you can take to reduce it in 2022.