Having a financial plan in action is one of the most important things you can do in…
Money is nearly in every facet of our lives and whether you agree or disagree, controls many different aspects. Understanding money and having control of your finances can be essential to not only your financial health but also your physical and mental health. According to the CoreData/Financial Mindfulness Financial Stress Survey , nearly 1 in 3 Australians are feeling financially stressed, affecting their mental, physical and relationship health. Poor financial health develops a negative cycle of stress which affect relationships, sleep, drug and alcohol use, and eating habits which then can impact your physical and mental health. According to Relationships Australia research financial stress is the No.1 cause of relationship breakdown  in Australia which in turn can lead to further types of financial stress.
Many individuals struggle with spending too much and saving too little. When we spend money, to some extent we feel good which triggers endorphins. People who gain pleasure and escape negative feelings through shopping sometimes call it “retail therapy.” However, this can often lead to buyer’s remorse when the credit card bill arrives. Credit cards, whilst useful if used wisely, can lead to overspending. When you use cash, you give the shop attendant money and after the transaction you are left with less money than you originally had in your wallet. However, where credit cards are used, money doesn’t physically leave our hand – we hand over our plastic and then it is returned to us, giving us less of a sense of loss than cash.
Make a budget
To combat financial stress analysing your current spending and constructing a budget is a great place to start. It can help identify your essential expenses, opportunities for cost savings and what realistically is left over to ‘spend’ on non-essentials. When expenses and spending are not tracked it is easy to overspend and resort to credit cards. To begin getting on top of your finances, it is important for you to tell your money where to go. You work too hard to let your money leave and not work in your favour. Regardless of your situation, it is important for you to take the time to identify your weak points whether its poor money management, overspending or debt. Doing this allows you to find a place to begin your journey to improving your financial health and in turn hopefully reduce your stress. Click here for a useful guide to debt reduction.
Consult a Financial Adviser
If you are experiencing financial stress it is critical to act sooner rather than later when your health and or relationships could be on the line. One way you can begin taking action is to consult a financial adviser. A financial adviser will work with you and your partner to plan for your financial future, both in the short term and long term. Short term financial planning may include debt reduction or purchasing a home, while long term financial planning looks towards funding retirement.
Along with assisting you in your financial planning, they can be a neutral third party that can advise you on efficient ways to use your money. They can help you set a budget, understand your cost of living, set attainable financial goals and keep you accountable. A financial adviser will work with you to develop a plan to help you achieve financial health. Depending on your circumstances, financial health can take a bit of time to achieve, like if you are out of shape and looking to become fit, it needs commitment and determination.
Financial health can affect your physical and mental health. With such important things at stake it is not wise to leave your financial health unattended. Get on top of it today and reap the benefits.
The information within, including tax, does not consider your personal circumstances and is general advice only. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser. The views expressed in this publication are solely those of the author; they are not reflective or indicative of licensee’s position and are not to be attributed to the licensee. They cannot be reproduced in any form without the express written consent of the author. Elliot Watson Financial Planning Pty Ltd and its advisers are Authorised Representatives of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.