Money troubles can affect us beyond our bank balance, impacting our mental wellbeing and self-worth.
We spoke to a financial counsellor to better understand what financial hardship can look like, what to do if you’re struggling to make ends meet, and how you can support those around you who might be doing it tough.
Linda Wright is a financial counsellor with EACH, working in Victoria’s east. financial counsellors – not to be confused with financial advisors – take a holistic approach in supporting someone through financial difficulty.
With more than 30 years in the banking industry, Linda has been helping people tackle debt and manage their lifestyle as a financial counsellor for the last eight years.
It can take just one major life event to put someone in financial hardship.
Linda says most of us are just one significant event away from facing financial hardship. Whether that be losing your job, having an accident, or even losing a loved one.
‘One minute you're okay, you've got your mortgage, your car loan, credit card, and you're up to date on paying your bills.
The next thing, something might happen. It might be a car accident, it might be a workplace injury, it might be family breakdown. These can all place stress on your finances, which causes hardship.’
Our financial situation is strongly tied to how we see ourselves.
It might sound materialistic, but Linda says a lot of our personal value and self-worth comes from our financial standpoint, what we earn, and what we have.
‘A lot of my clients value their self-worth by their assets. So, when their assets are at risk of repossession – it might be repossession or file foreclosure of a house – there can be a lot of shame and embarrassment, and just a complete re-adjustment of lifestyle.’
Things can change in the blink of an eye; we’ve seen this play out in a big way over the last two years . And while most of us don’t want to live our lives preparing for the worst, Linda has some advice on what to do if your financial situation is beginning to overwhelm you.
Go straight to the source of your financial stress.
If you’re falling behind on regular bills and find there’s one main utility or service that’s becoming a major pain point, Linda says it’s best to contact the creditor directly.
‘Every financial institution has a hardship department where they're especially trained to take these queries from somebody experiencing hardship.’
Every person working in a hardship department, no matter the organisation, is professionally trained to support and guide their customers to a better outcome.
While this sounds simple in theory, Linda acknowledges this can be overwhelming for someone, given financial stress often goes hand in hand with another significant event.
‘It’s going to be hard for them to sit down and work out a payment plan on an energy bill if they’re worrying about relocating, or something like that.’
We need to shift the way we think about budgeting.
Linda says a budget should be considered a long-term tool rather than a short-term fix.
‘A budget is really just a lifestyle tool. A budget defines how much you need to live on to maintain a lifestyle.’
When looking at your own personal budget, how you make money decisions should be customised to you. There are online calculators and tools that can help you work out an optimal budget, covering your basic expenses , but it ultimately needs to align to your life and what you value.
‘Your lifestyle is attached to your values. So, what I value in a budget might be very different to what you value,’ says Linda.
Financial hardship is more common than you might think.
If you have someone in your life that is struggling financially, Linda says it’s important to remember this kind of thing can happen to anyone.
‘We need to take the stigma away. Take the embarrassment and shame away.
‘We've got to normalise that this happens to everyday people all the time. You can go from a millionaire to bankruptcy next to overnight, and it's only one significant event that will put everybody into hardship.’
She says the next step in helping someone is to encourage them to seek help, whether that be referring them to a service or helping them contact their creditors for assistance. Let them know they’re not alone and help is available.
Reach out for financial hardship assistance.
Life can throw unexpected surprises at us, good and bad. Through our Hardship Assistance Policy, we may be able to help with any difficulties you’re experiencing.
If you’ve lost your job, suffered an illness or injury, or been affected by a natural disaster, we want to help you manage your financial position.
Speak to one of our team members on the following numbers
1300 500 520 Monday to Friday 8:30am – 5pm. Or after hours on 13 15 63.
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This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice.