The Courier-Mail

Don’t panic over finances

You can avoid financial stress, but if you are stretched, there are things you can do, writes Sophie Elsworth

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WALLET worries can lead to you getting tangled up in severe financial stress.

Losing a job, becoming sick or being injured, going through divorce or taking time off work to have a child are often common events that can trigger Aussies to run into financial trouble.

So in order to alleviate those fiscal woes that may be causing sleepless nights, it’s essential to have a strategy.

Here’s some simple ways to avoid financial problems spiralling out of control.

SPEND LESS

In theory in sounds easy, but in practice it is tougher.

Navacue financial adviser Ian Fox says one way to do this is split up your money for the different things it’s needed for, and park it in separate accounts.

“Spend less than you make. We live our lives and if we need something we put it on our credit card with the intention of paying it back, but by the time we’ve finished we’ve got debts of $20,000 or $30,000,’’ he says. “Have separate bank accounts for separate things in your life, for example, have a separate account to pay for a holiday and

one for groceries.”

BORROW

LESS

Record low interest rates make it enticing to borrow more money than we otherwise would, but Fox says Aussies should think twice before loading themselves up with debt.

“What goes down must come up and interest rates will eventually go up,’’ he says.

Banks are tightening their lending criteria but borrowers also need to be comfortabl­e with their debt levels and ensure they can meet repayments if interest rates do eventually rise.

GOAL SETTING

If you are in financial trouble, it’s important you have a strategy to tackle debts or bills.

Map out a budget and work out a plan of getting yourself out of financial trouble.

This includes working out how you are going to be able to oay for the basics including dayto-day living expenses, or other expenses such as rental costs or paying the mortgage. Also being able to pay for holidays, children’s education or home maintenanc­e and renovation­s.

ASK FOR HELP

Financial Counsellin­g Australia’s executive director Fiona Guthrie says help is available – there are free financial counsellin­g services both on the phone and in person. “Speak to a free and independen­t financial counsellor, you don’t need to go and pay someone to listen and understand,’’ she says.

“Also contact your financial institutio­n, they’ll be very interested in helping you, they'll be there for the good times and the bad times.”

To contact a free financial counsellor, phone 1800 007 007.

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