Are you experiencing money worries at the moment? If so, I’m very sorry to hear that.
Sometimes it’s tough to read blogs by people who have it all figured out. For that reason, I wanted to share one of my own money weaknesses and worries in the form of a real-life situation my family went through.
It happened about ten years ago now, but I still think about it often, and it’s shaped how I handle money stress ever since. I hope sharing it will help you find your own way through.
5 Tips for Coping With Financial Stress
My husband and I had just returned from living overseas. I was pregnant at the time, and we had a preschooler.
We came home with $10,000 in our emergency fund to last us until we had regular income again.
Being pregnant, jobless and without any source of income, we were very stressed.
1. Acknowledge the problem
Acknowledging that a problem exists is the first step to fixing it.
Burying your head in the sand or going on a credit-card-fuelled spending spree will make things one million times worse.
Whether you’re overdue on a payment or facing a stretch without income, the hardest but most necessary step is accepting the problem exists.
Only then can you figure out what to do to fix it.
2. Talk about it
One of the major factors that keeps people in debt is the inability to discuss money issues with friends and family.
Admitting that you’re experiencing financial issues can be difficult, but it might also be exactly what someone else needs to hear.
Being the first to admit you’re having problems might help someone else do the same.
If for no other reason, make sure you tell those close to you so they know why you can’t go out for dinner or do activities that cost money. Tell them you’re more than happy to go to the park or hang out doing free stuff instead.
3. Assess your means
This is where you sit down and figure out all of the resources you have available to help you through the tough times ahead.
Cash and funds
Work out what you have available in savings and cash accounts. These funds should be your first source of emergency income.
Only after you’ve accounted for savings should you look at your credit card. It’s for this reason I’ll never be without one – credit cards are great for emergencies.
But paying over 20% interest on your purchases should be enough motivation to minimise how often you use them.
Non-cash sources of income
Now look at other ways to bring in extra income:
- You might have a spare room you could rent out.
- Look at eligibility requirements for income assistance.
- Find things you can sell.
- Find a part-time/evening/casual job to help until you’re back on your feet.
Related: 39 Side Hustles to Make Extra Money in New Zealand
At the time, we had savings of around $10,000 plus around $20,000 available on credit cards, though it would have taken a near-crisis for me to actually run a balance on them.
We knew that as soon as we were able to re-enter the country we’d be eligible for child tax credits again, and we did everything we could to find my husband a job within six weeks.
We used our free time to update CVs and scour job sites.
We also sorted out our storage unit and sold some things, since we’d lived well without them while overseas.
And I put more time into building up my freelance business to boost our income.
4. Play out your worst-case scenario
This may sound a little negative, but knowing how dire things could realistically get is a great way to keep things in check.
Depending on the resources you have available, your worst-case scenario could mean having to ask for help from government agencies, or it could just mean reining in spending for a few months.
Having funds in an emergency fund is what makes the difference here.
At the time, I was comfortable with the amount we had left in savings. I knew it could last a long time if we worked to our leanest budget.
Our worst-case scenario was having to stay with my parents for a few months while we built up enough money to move back into our house.
5. Look after yourself
Make sure you get regular exercise. A 30-minute walk in the fresh air will do wonders for your mental state.
This pamphlet from the New Zealand Mental Health Foundation also has some excellent advice on dealing with financial stress.
Resource: 7 Places To Get Help With Debt In New Zealand
Coping with financial stress isn’t something you have to do alone. Ask for help and talk about your struggles.
And prepare for the worst – hopefully it won’t happen, but if it does, you’ll have a plan in place to get you through the tough times.
