Women and Super

The disparity between men and women with employment incomes is well known and persistent. This pay gender gap causes women to experience financial stress.

But another major flow-on impact of that pay divide is the gap between men’s and women’s superannuation balances.

Figures from the Australian Taxation Office’s most recent statistics report showed the average superannuation account balance for; men $161,834 versus $129,506 for women, a $32,328 difference or 20% less.

Considerable research shows women suffer more financial stress than men for a range of reasons. The super gap between men and women is one reason but it also exacerbates existing financial stress at retirement age.

Unfairly, family commitments have a huge impact the amount of super a woman accumulates over a lifetime.

Research by the Association of Superannuation Funds of Australia (ASFA) shows that taking a year off each for two children can lead to women having 10 per cent less in superannuation at retirement.

According to the ASFA Retirement Standard, couples ideally need to a lump sum of $640,000 and singles need $545,000 by the age of 67 to avoid struggle in retirement.

Options to safeguard superannuation for women seem on the surface limited as they are pegged to income – and significant income gaps remain between the genders.

The ATO figures show average taxable income is $74,559 for men, $21,000 more than women who earn an average of $52,798.

How can a mindful approach to money help?

Mindfulness is about paying attention to help make wise choices with your money and all personal finance options.

When it comes to super, many people don’t pay attention to it, forget about it, or don’t value it highly enough.

Being mindful with your superannuation is about keeping track of it, investing it in alignment with your values and risk profile, maximising contributions, and minimising fees.

“Paying this level of care and attention to your super fund will help it to grow,” says behavioural money coach Lea Clothier.

If you’re in a partnership, it could also mean having a discussion with your partner about ways you can boost your super savings through voluntary contributions, which have tax benefits.

Voluntary contributions can come from a range of methods including:

    • Selling personal items;
    • putting cash bonuses into super; and
    • putting tax refunds into super.

“Why not think about contributing it to your super all or in part, if you can afford to do so, and it’s within your agreed strategy?” Ms Clothier says.

Also, consider the many incentives available to help you boost super like salary sacrifice, spouse contributions and co-contributions.

Talk about super

With all things finance and partnership, constructive, open conversations usually support the health of the relationship and the health of our finances.

There are many options available to work together to boost your super balances together, and as a team.

If increasing super is a priority, then it’s also important to communicate this priority with your accountant, adviser and any other professional that you get financial advice or guidance from.


    • Pay attention to your super – it’s your future money. Check your contributions, investments, fees, and overall performance at least annually.
    • If you’re a couple, consider Spouse Contributions to help top up the shortfall.  Generally, for women earning less than $37,000 per year, their spouse can generally contribute $3,000 each year to their super and receive a $540 rebate on tax.
    • Consider making small, regular additional contributions to your super fund. With the benefits of compounding, even small amounts will grow over time.
    • Salary sacrifice can be a great way to boost your super savings whilst also reducing your personal tax.
    • Make the most of the Government co-contribution. If you’re eligible, this amount can be up to $500.




Why women suffer more financial stress

Recent studies have found women feeling considerably more financially stressed than men – but why?

In the United States, a May 2022 study of 2,456 adults by Bankrate, found women are more likely to be negatively affected than men. Women are significantly more likely to cite money as having a negative impact on their mental health, with 46 percent selecting it compared to 38 percent of men.

Among those who said money negatively impacts their mental health, women are more concerned than men about having enough emergency savings and paying for everyday expenses (at a respective 60 percent and 59 percent, versus 53 percent each for men).

Common financial situations are also more likely to trigger negative emotions for women than men, such as checking one’s bank account (52 percent of women versus 46 percent of men) or facing unexpected expenses (73 percent of women compared with 64 percent of men).

The study also found women are more upset by events such as an unplanned expenses, when bills are due, and when bills are paid.

More women (at 41 percent) said their mental health was negatively impacted by fears of being unprepared for retirement than men (at 36 percent).

Also, the survey found that men (at 50 percent) were also significantly more likely than women (at 37 percent) to say they have stocks or stock-market related investments.

In Australia, NAB’s March 2022 (Q1) wellbeing survey found financial stress levels continue to be lower for men compared to women, and the gap has widened. Men reported slightly lower financial stress in Q1 (down 0.4 to 38.6), but it increased for women (up 1.0 to 42.6).

Women reported higher stress for all measures except credit card repayments. Relative to men, women reported much higher stress levels over home improvements and maintenance, raising $2,000 for an emergency, non-essentials, major household items, financing retirement, providing for their family’s future, and medical bills.

Overall debt stress among Australians women (40.5) reported higher debt stress than men (36.7). The number of Australian women who missed a bill or loan payment reported was 25% compared with men at 19%

It’s been happening for years. Back in 2014, the Australian Psychological Society (APS) reported “personal financial issues” were a major source of stress for 53 per cent of women but only 44 per cent of men.

The APS found three main causes of stress amongst Australians (in order) were personal finance, family issues and personal health.

One explanation for women’s financial stress is historical and current pay inequity

In Australia, according to the Workplace Gender Pay Gap Statistics (WGEA), Australia’s national gender pay gap is 13.8% as at February 2022. The national gender pay gap is calculated by WGEA using data from the Australian Bureau of Statistics (ABS).

The current male average weekly ordinary full-time earnings is $1,846 compared to $1,591 for females.

This means that on average, women earned $255 less than men.

In the US, their 15 March 2022 Equal Pay Day highlighted 83 cents: that’s how much women in the US who work year-round are paid for every one dollar paid to men.

That’s 15 months. Or, if you look at a typical 9:00 – 5:00 workday, women start working for free at 2:40 p.m.  Over half a century after the US passed the Equal Pay Act, American women still face a substantial gender wage gap across the spectrum.

At the same time, women traditionally have had more responsibility for the day-to-day running of the home, such as domestic duties and childcare. In recent times though women’s involvement in financial decision-making – and sharing costs – in relationships has increased.

One could speculate shouldering more financial responsibility while still earning less and doing more than men at home might be a factor in women’s higher levels of financial stress. There is also evidence that risky behaviours with money, such as impulse spending, are linked to feelings of stress, guilt, boredom and anger.

The problem with financial stress is that it does not just impact our finances, it can have a significant effect on our wellbeing including our physical and mental health along with our relationships, work, behaviour and potentially our environment.

Seeking help around our finances and feelings of financial stress eventually becomes essential.

The help required will vary for individuals. It may be practical financial support, learning budgeting skills, increasing your financial literacy or seeking assistance to manage the stress of money worries.

One solution for some sufferers of financial stress is to become financially mindful.

Financial mindfulness, is an active process of paying attention to your finances, financial behaviours, attitudes, and beliefs around finances. It is keeping awareness of your thoughts, feelings, actions and financial environment in mind so that you can make better financial choices.

Under-earning and financial stress

At a time when basic living costs are dramatically rising, with inflation set to hit 7 per cent this year, how much we earn comes into sharp focus.

With costs continuing to rise, we are forced to ask ‘do we earn enough’?

The most basic of all budgeting logic tells us to track our in-comings – most obviously our salaries and wages –against costs.

If outgoings exceed in-comings we are in trouble.

It hasn’t gotten that bad for the majority of Australians just yet, but when that crucial gap narrows, the narrowing gap between what comes in and what goes out creates anxiety and financial stress.

There is a very real perception for thousands of Australians – even hundreds of thousands – that they are under-earning.

Years of low wage growth actually back this up.

Since March 2009 wage growth has weakened and tended to lag behind inflation, effectively creating a real wage cut.

Does under-earning really exist?

‘Under-earning’ – that some people earn less what they’d like to earn – might sound like an odd idea in a free market.

The market tells us that we earn what the market decides, right?

It’s true to an extent, but that equation arguably does not apply to many circumstances.

Some of these are created by structural and systemic pay gaps. Such gaps are well-established and supported by research and evidence.

The best example is the gender pay gap. Currently, Australia’s national gender pay gap is 13.8% per cent, meaning on average women earn $255.30 less for the same work as men each week.

The gender pay gap also leads to a gap in superannuation which makes retirement for some single or separated women a frightening prospect.

There are other recognised pay gaps, for example government research shows Indigenous households earn 69 per cent of non-Indigenous households.

Another factor missing in the equation that is supposed to say ‘the market pays what people are worth’ is our own propensity to undervalue ourselves.

Once we dig into it, this is a chronic and widespread issue and a major cause of unnecessary financial stress.

But for now, let’s acknowledge that most negotiations around worth and value are ‘two-way’ streets. There is a buyer and a seller and both come to an agreement before a contract is signed.

Alongside under-valuing themselves the ‘under-earner’ may display a number of related behaviours that could be reasonably be described as self-defeating. We will come back to that.

Obviously not everyone under-values themselves. Many people have a clear idea of this and are happy with what they get paid.

Certainly, some people over-value themselves too. They might be under the misapprehension they are under-earning when they are not.

It’s important to note too, that a lot of people who experience financial stress are adequately paid.

Their financial stress could be caused by any one of many issues including: the current cost of living crisis, an inability to stick to spending limits, compulsive shopping, excessive gift-giving, being hit by unexpected expenses, unemployment. The list is long. We cover these issues in our regular articles.

What is under-earning?

It’s important to acknowledge too that under-earning is not solely an issue for people impacted by systemic pay gaps, and that pay gaps may be only part of a suite of issues facing the under-earner.

Chronic self-defeating behaviours and beliefs play a part for many.

The American author and financial therapist Barbara Huson uses the phrase someone who makes less than she needs or desires despite efforts to do otherwise’ to describe under-earning.

She says under-earning has seven recognisable signs:

    • Financial chaos (especially debt problems);
    • Vagueness about money;
    • A sufferer underestimates their worth;
    • An anti-money attitude;
    • Self-sabotage;
    • Putting others ahead of their own needs; and
    • Craving comfort.

One worldwide peer network addressing under-earning has a more complex definition: ‘While the most visible consequence is the inability to provide for one’s needs, including future needs, under-earning is also about the inability to fully acknowledge and express our capabilities and competencies. It is about underachieving, or under-being, no matter how much money we make.’

That network is characterised by peer-run meetings which gather in person and online to specific help sufferers address and recover from under-earning.

One of its core documents, ‘symptoms of under-earning’ lists some traits that may be familiar to under-earners:

    • We undervalue our abilities and services and fear asking for increases in compensation or for what the market will bear;
    • We feel uneasy when asking for or being given what we need or what we are owed;
    • We do not follow up on opportunities, leads, or jobs that could be profitable;
    • We begin many projects and tasks but often do not complete them; and
    • We compulsively reject ideas that could expand our lives or careers, and increase our profitability.

In a TED Talk, Paul Sunderland, an English consultant and trainer, calls under-earning an “inability to earn what we really deserve… despite the desire, the effort, the opportunity [and] the qualifications”.

He says it is about ‘turning our backs on money’ and he details why he believes under-earning is ‘an addictive process’ for some people.

That suggests an obvious point: have we checked the boxes against a belief that we are under-earning?

    • Do we have the desire to earn more?
    • Are we properly trained?
    • Have we taken or do we seek opportunities to earn more?

If we cannot meet these conditions, under-earning could be circumstantial. Otherwise, there’s probably more to it.

The psychological aspect in financial stress

Let’s take a step back and look at some key elements of financial stress, which is what Financial Mindfulness deals with.

That could help clarify the link between under-earning and deeper issues for many.

From what our experts have found through years of research and helping clients, financial stress:

    • Involves our thoughts about money and finances;
    • it is related to money worries;
    • involves our emotions, especially fear;
    • arises in relation to stressful situations, such as loss of employment;
    • has a significant impact on our mental and physical wellbeing;
    • can cause sleeplessness;
    • can lead us to feel downhearted; and
    • can affect our relationships and behaviour.

It is clear from the above list that a lot of financial stress has a psychological impact.

This has been one of the building blocks of the work Financial Mindfulness has done in measuring financial stress and developing a solution.

We need to emphasize here that we are not providing a tailored solution for the issue of under-earning.

But we are acknowledging its impacts on many people suffering financial stress who may be interested or benefit from a solution such as Financial Mindfulness.

The relevance of the psychological aspect to financial stress is where certain types of under-earning become clearer.

As Mr Sunderland noted: why would people turn their backs on obvious opportunities to make more money and effectively block themselves from receiving it?

When dealing with financial stress and/or under-earning, it’s important to acknowledge our behaviours with money.

If you’re someone who has avoided budgeting, that is a red flag that you may be avoiding how money really functions: as a system of exchange for agreed value.

What to do about under-earning?

The first step in dealing with a problem is to accept that it exists.

Ms Huson says being ‘scared’ by the prospect of doing something to earn more money is a sign you need help with this issue – though she advises getting enough support as you step outside of you comfort zone.

Overcoming structural and systemic pay gaps are difficult, it takes a clear-headed, well-planned approach to do it even in the best of circumstances.

But the reality with some pay gaps is that your organisation may be unwilling or unable to see a pay gap even exists. In that organisation it will be difficult to overcome the under-earning on your own.

Other organisations make pay equality a priority and see it as an organisational strength. We’d suggest researching these organisations and targeting them with your resume.

The peer group we referred to earlier also uses a combination of approaches including:

    • Peer support;
    • Sharing and shame reduction around money;
    • Addressing compulsive shopping and overspending;
    • Goal-setting;
    • Establishing a vision;
    • Accounting for time; and
    • Create an earning plan.

Overcoming under-earning

Overcoming under-earning may require pushing through to make changes in our circumstances – for instance retraining and upskilling. But it can also be more complex.

In some instances, additional help may be needed, such as a money behavioural coach or even a therapist.

But the steps are likely to include:

    1. Being clear whether we are under-earning – and to what extent – by connecting with peers;
    2. Acknowledging gaps in our skills and qualifications and taking the appropriate actions;
    3. Understanding whether we are being held back by being in the wrong job;
    4. Learning more about our own beliefs around money;
    5. Deciding to earn more and committing to action in pursuit of this goal;
    6. Getting comfortable with the fears these decisions and actions bring up;
    7. Honestly confronting our financial stress and stressors;
    8. Properly valuing and respecting our own time: it is as precious as anyone’s; and
    9. Addressing self-sabotaging behaviour with money and improving our financial skills;

It’s important to acknowledge that overcoming under-earning may not be a linear process. It could involve ‘one step forward and two back’ to re-set and realise your earning power.

It could be as simply as being braver with the rates you charge. But it could also involve loss of employment, which in itself can be a devastating life event, but one that leads to an empowering transition.

This could be a quick or slow process, but as with all financial change, once we commit it is life-changing.



Proving the business case for financial wellness programs

Financial wellness has been a buzzphrase in the workplace for many years, with good reason.

More and more data are showing employee financial stress decreases productivity.

In Australia, AMP’s 2020 Financial Wellness Report showed 1.8 million Australian workers suffering prolonged financial stress, costing $31 billion in lost productivity.

The 2022 PwC Employee Financial Wellness Survey covered 3,000 full-time employed American adults. They found two out of five full-time employees said their top financial pressure is that everything costs more these days, and financial stress can run deep.

Addressing those concerns and improving the work environment for your employees often requires a better understanding of three critical areas that significantly impact an organization’s culture and, ultimately, business success.

Retention: Financially stressed employees are twice as likely to seek a new job. Employees looking for a new job deal with critical cash and debt issues and are less confident that their current employer cares.

Mental health: Financially stressed employees are three times as likely to feel a big negative impact from money worries. Employees are six times more likely to say that financial stress has severely/majorly impacted their productivity at work and twice as likely to be looking for a new job.

Productivity: Financial stress has multiple ripple effects. Among employees who say that their financial worries have had a severe or major negative impact on their productivity at work, 67% are struggling to meet their household expenses on time each month, 71% have personal debt, and 64% are using credit cards to pay for necessities they couldn’t otherwise afford.

The United States is, of course, a different market, but the underlying principles apply to Australia: financial stress affects employees’ health, productivity and retention.

The cost of living in Australia has escalated at a record-breaking rate as inflation bites. Interest rates are increasing, and mortgage stress is increasing.

In the Employee Financial Wellness Survey report, PwC outlined four steps it believes employers should take to strengthen workforce financial wellness.

They were:

    • Make the business case for supporting employee financial health;
    • Recognize what’s happening for employees at home;
    • Leverage momentum to promote good financial habits, and
    • Implement a technology solution paired with human interaction and guidance.
    • The second point – what’s happening at home – is a difficult balancing act. It is clearly private but also incredibly insightful information.

Insights can be gained without breaching privacy by gaining employee permission and buy-in to anonymized data collection. But the need to tread carefully and ethically on this point cannot be overstated.

Leveraging positive momentum – such as employees who have improved their financial position – is important because it reinforces good behaviour and builds trust. Constructive, positive reinforcement feeds on itself, producing positive results – as good leaders know well.

In identifying that 87 per cent of employees want help with their finances, PwC confirms the principles underpinning the financial wellness movement.

This is a case-by-case, site-by-site problem – but people generally want tools, and online delivery is almost always seen as advantageous today, especially with work-from-home so widespread.

The first item in PwC’s list of four steps – Make the business case for supporting employee financial health – is what we’ll concentrate on here because it sets the groundwork for everything else that follows.

PwC makes an important point at the outset: understand what changes in financial stress might be doing to your workforce.

To do that, you have to choose key metrics.

The three PwC suggests are ‘productivity, retention, and physical health’.

Others might include absence rate, job satisfaction, engagement, turnover, career path ratios and the impact of training.

You may find other metrics more useful or relevant to your business.

The Financial Stress Index (FSI) provides a tool to track changes in key metrics over time to give some insight into what is happening for employees to develop effective solutions.

Most significantly, the FSI tracked self-reported changes across a sliding scale of financial stress categories.

Specific and measurable key metrics included in the FSI include:

    • Productivity;
    • Absence; and
    • Physical health.

The FSI provides behavioural insights into financial stress that could contribute to changes in other metrics, such as:

    • Job satisfaction;
    • Career path ratios;
    • Engagement; and
    • the impacts of training.

They also contained a rich data set that included insight into what was happening at home for employees and indications of changes in employee mental health.

In March 2021, comparative FSI insights as they applied to Australian survey respondents across three six-month periods were released.

Comparative data was collected on:

    • Effectiveness at work;
    • Time off work;
    • Days lost due to low productivity; and
    • Changes in physical illness symptoms.

All the above data was collected within the context of levels of financial stress.

How to deal with the financial stress from increased cost of living pressures

Australia is in the grips of cost-of-living crisis which poses a threat to the financial stability of many, with high levels of financial stress almost guaranteed for millions experiencing rising costs.

Escalating prices for fuel, groceries and rapidly climbing interest rates mean that the sustained historic period of low interest rates and slow price growth is officially over.

The Reserve Bank of Australia raised the cash rate by 50 bps to 0.85 per cent during its June 2022 meeting. This was the first back-to-back rate hike in 12 years.

Over the twelve months to the March 2022 quarter, the Consumer Price Index rose 5.1 per cent, the fastest rate of increase for 20 years in Australia.

It’s expected to climb higher still.

Fuel costs were up 11 per cent, housing up 6 per cent and groceries up 5.3 per cent.

Education costs and household services and equipment also spiked in the past year.

Reserve Bank of Australia governor Philip Lowe publicly said he expects the inflation rate to hit 7 per cent by the end of 2022.

At a household level, this macroeconomic data is merely confirmation of what we know from first-hand experience: our living costs have grown sharply.

The cost of living and financial stress

For many people, managing money can be stressful, but it becomes even more so when money is tight in a household.

“Fear, anxiety, and depression can all creep into a relationship with money when finances are tight,” said money educator Lea Clothier.

It can also cause conflict in relationships where couples are feeling stressed by their financial situation and unable to get on the same page with their finances or communicate about it.

Financial stress can affect people’s self-esteem, and their mental well-being, and cause insomnia, anxiety and depression.

“This will have an impact on someone’s health, overall well-being and ability to function in their day-to-day lives,” Ms Clothier said.

Financial stress is also a cause of lost productivity in the workplace.

There are several studies that show the lost number of days that people have due to financial stress and/or worrying about their finances.

The cost of living and financial well-being

Our ability to stick to savings goals and plans are major building blocks in our financial well-being.

Rising living costs, with expenses like groceries, petrol, rent, mortgages and other loan repayments, can cause financial stress and can detract from our savings goals and plans.

When costs increase, we have two main options – earn more money, or spend less.

Rising costs of living will ultimately result in people having less spare cash to save or make additional debt repayments.

Which costs do we need to be especially mindful about?

Energy and fuel are some of the biggest expenses for business and families.

Fuel costs impact on most people, either through what it costs you to fill your tank, to the cost of ride-sharing, cabs or distribution for businesses.

There’s a limit to how transport costs needed to run a business can be reduced.

But at a personal level we can trim costs by using low-cost travel options like public transport and by applying fuel discounts open to consumers.

Rising grocery and energy costs will flow through to increased entertainment costs – in places like restaurants and accommodation.

Unless we can absorb these increased costs, invariably this means cutting back on eating out and entertainment.

How budgeting helps

Budgeting is not a once off event, it is a continuous activity where you are revising and making changes to stay on budget.

‘When you start to fall outside the rails, sometimes because of increased costs, that is when you make the necessary changes before it becomes a problem,’ says FM founder Andrew Fleming.

Revising your budget is very important to keep your household spend manageable.

Your budget should be a ‘live’ document that takes into account your changing circumstances.

So, if your income changes, your budget should be altered. When your costs go up, you must adjust your budget to reflect this.

You can read more about why budgeting matters and how to budget in our previous blogs.

The main steps to budgeting as we have determined them are:

Step 1: Properly determine your household income;

Step 2: Begin tracking your living expenses;

Step 3: Balance your budget;

Step 4: Go back and review your expenses;

Step 5: Review your income potential; and

Step 6: Balance your budget again.

The weekly reality of staying on track requires that you maintain your budget – that is made up of separate set of actions. The basic steps are:

Step 1: Schedule your budgeting practice;

Step 2: Make budgeting a game that you win at;

Step 3: Review the value of your money and simplify your budgeting;

Step 4: Get smarter about your use of credit;

Step 5: Get real about planning;

Step 6: Experiment with ‘not spending’;

Step 7: Nominate a budget buddy and become accountable; and

Step 8: Become proactive – and stay positive.

Some budgeting tips for 2022

When living costs are increasing in most of our essential expenses it can be difficult to find areas to cut back in a budget.

It can be a good time to review budgets, cutting back on non-essentials (such as shopping, entertainment and dining out) and adopting a savvy mindset to see where you can make savings, for example using fuel discount vouchers, shopping in bulk, and being energy smart to save on electricity costs.

It’s important that people make their savings goals and additional debt repayments an expense item in their budgets, rather than just using what is left over for these.

Otherwise, people will often find that there is no spare money to contribute towards these priorities.

 What other spending should you be examining

“A key spend to keep close tabs on is your grocery shopping,” says Andrew Fleming, CEO of Financial Mindfulness.

“You need to avoid buying items you previously have always purchased and find a cheaper alternative. For example, I love iceberg lettuce for my salad but have stopped buying it at $5 and over.

“This item peaked at $12 at stores in some states. Before the recent price increases, it was $2.80 each.

‘My salads now lack the good old iceberg lettuce, but that is ok for now until prices come back. Review all of your shopping items with this mindset.”

It’s worth noting that in the age of consumer choice, the places we relied on to provide value for money are changing.

For instance, there has been coverage in the media lately about the prices of fresh produce in Australia.

Major supermarkets, for so long the paragon of low prices, are no longer guaranteed to offer the lowest prices – despite what their marketing says.

In many cases large suburban greengrocers have enough buying power and discretionary pricing to offer much lower prices on most lines of fresh produce.

Go and do your own research.

Health costs are starting to increase too – though you may be wise to accept these costs with a view to your future.

But we can certainly examine health costs, just as we can examine all costs.

‘These can be as little as the odd extra doctor’s appointment, to mental health plans and the visits to counsellors or psychologists, loss of income due to excessive time off work and lost deposits for holidays that have to be cancelled last minute,’ says Hamish Ferguson, of Financial Mindfulness.

Mr Fleming says review of all your credit products is a good idea to ensure you are not paying too much in fees.

‘If you are paying interest on your credit card, you are really at a disadvantage with the current average credit card rate charging at 19 per cent per annum.

‘Some banks are offering no interest for up to 25 months (including the balance transfer) with a zero per cent purchase offer credit card, that is a big win to help with the cost-of-living pressure.’

How mindful spending can help

Many of our habits with money are automatic, meaning that we’re often managing money in a mind-less way.

‘Financial mindfulness is the act of bringing awareness to the way we interact with our money,’ says Ms Clothier.

‘It’s about paying attention to what is happening in the present moment with your finances.

Stress is often heightened when we project into the future, so keeping our focus on the here and now can help to make finances easier to manage.

That includes becoming stressed about our finances and predicting a catastrophic outcome without discussing options – for instance housing or business repayments.

Financial stress of this type can be so overwhelming that we turn to dysfunctional and unhealthy coping strategies such as gambling or over drinking.

‘It’s about paying attention to and managing your day-to-day spending, tracking your spending, and being mindful in your shopping and spending decisions.’

An element of this is mindful-shopping: be curious about prices, your real needs and aware of both sides of the consumer-retailer relationship.

Ultimately the main point of almost messages about shopping is to encourage you to increase or at least maintain your spending.

“Marketing tactics such as one time only sales offerings, promotions and discounts are all designed to get us to spend big,” says Ms Clothier.

“Tactics such as the use of time, or volume-based limitations and ‘buy now or miss out’ messages create a sense of scarcity and trigger a fear of missing out (FOMO).”

Creating a perception of scarcity is a successful way of making goods and services seem more appealing. Big companies spend millions unlocking the psychology of shoppers, because doing so is worth billions.

Generally, red flags include words, phrases and images such as:

    • for a limited time only;
    • 24-hour sale;
    • hurry;
    • don’t miss out; and
    • any symbol suggesting a countdown, such as a clock.

Top five reasons people get into mortgage stress

Mortgage stress is never far from the news in Australia.

With years of historically low-interest rates and a booming property market, home ownership became within the reach of millions.

But the flipside of realising ‘the great Australian dream‘ of home ownership is suffering financial stress so severe that you can risk losing your home.

The reality is now sinking in for millions of mortgage holders after last week’s 50 basis-points interest rate rise.

Current data from the Australian Prudential Regulation Authority (APRA) shows that 280,000 Australians are most at risk from rising rates having borrowed six or more times their income and/or having loan-to-value ratios of more than 90 per cent.

This is out of one million loans taken out in the past two years, which the Reserve Bank of Australia (RBA) thinks are most at risk of tipping into mortgage stress with multiple rate rises.

The RBA estimates that a 200-basis-point increase in interest rates from current levels would lower real housing prices by around 15 per cent over a two-year period.

RBA data showed that the cost of living had hit a 22-year high, rising to 5.1 per cent from the year to March 2022. This has left the RBA with little choice but to hike rates multiple times this year.

The June 2022 rate increase is the largest increase in 22 years, this was the same time the Olympics were in Sydney.

There is now a whole generation of first-time borrowers who have only experienced rate decreases, not increases.

The cost of living has increased and will continue to do so. The March 2022 quarter headline inflation number of 5.1% doesn’t reflect the upcoming price hikes which are predicted to bump up inflation to 7%.

Electricity prices are set to increase on average by 18% from 1 July 2022. Groceries have continued to rise and are forecasted to increase by another 12% throughout 2022.

Fuel prices are increasing due to global events despite the recent fuel excise tax relief. HECS debt was increased by 3.9% on 1 June 2022.

The cost of renting a house has soared by up to 21.2% in Australia’s capital cities, with further rises expected as the national rental crisis deepens.

For many people, mortgage stress from these interest rate rises has become a reality. They would come under increased financial pressure and financial stress, with a greater risk of defaulting on their mortgage and losing their home.

But the reasons for mortgage stress are not quite as simple as we might think: interest rates might go up.

In this article, we look at the top five reasons people come under mortgage stress.

What exactly is mortgage stress? 

In general terms, mortgage stress occurs when a household has trouble meeting all its bills and repayments and its ability to make mortgage payments comes increasingly under pressure.

But there are more specific definitions too.

The most widely accepted definition is that mortgage stress is triggered when a household with a moderate or low income spends 30 per cent or more of its pre-tax income on home loan repayments.

Digital Finance Analytics defines mortgage stress more simply – as when homeowners spend more on repayments and other living costs than they earn.

Reason one: Borrowing more than you can afford 

‘It is common for people to think about what interest rates are now rather than what they might be in the future,” says Hamish Ferguson, a director of Vision Property and Finance.

It’s important to consider whether you could still afford mortgage repayments when conditions change – as they are.

“I recommend that you can still afford the property at 6 per cent interest rates,” Mr Ferguson said.

On the average Australian home loan, which is currently $595,000, an extra three per cent would cost over $1,000 extra for each monthly repayment, or $400,000 over the life of a 30-year loan.

Not having enough money to prepare properly for the expenses related to property ownership – such as maintenance or improvements that may happen over time – trips up homeowners. You can ask yourself the question can I really afford to buy.

Reason two: Major changes to your situation 

Lost a job, suffering ill health and experiencing major family changes can throw people into mortgage stress.

Some people purchase property with two incomes, then have one or more children, and find the loss of one full-time income as well as the increased family expenses hit hard.

“A lot of people don’t have sufficient insurance to cover their income if they fall sick or have an accident,” Mr Ferguson said.

Many people live as if their current situation won’t change and don’t build up enough of a buffer to reduce the shock of major changes.

Then when an unexpected large expense comes up they don’t have the reserves.

Life changes, and we need a financial buffer.

“‘I remember reading that around 30 per cent of people couldn’t find $3,000 if they needed it,” Mr Ferguson said.

Reason three: Interest rate increases 

Without question, changes to interest rates do cause mortgage stress but the higher repayments change the equation people have relied on.

Banks today put a minimum 3 per cent buffer on loans so they are working out affordability.

“Generally, though once people have bought, they slowly relax on their lifestyle, or their lifestyle becomes more expensive,” Mr Ferguson said.

It is important to remain mindful about our finances throughout our lives and they unlock freedom when in good shape – or cause a huge range of negative impacts when financial stress emerges and becomes chronic.

Reason four: Taking on too much debt 

Often within two years of purchasing a property, many people will upgrade their car or take out some other type of loan.

“When this happens there’s usually not sufficient preparation for other expenses or loans,” Mr Ferguson said.

“People are generally not aware of how this new debt can impact on their financial stability if a few large expenses crop up.”

Reason five: Poor communication 

It sounds obvious, but good communications usually make sense but in practice, we know they are anything but simple.

“It is surprising how often one person in the household is keeping an eye on the finances,” Mr Ferguson said.

As their financial position becomes tighter and tighter over time, that person doesn’t communicate properly with the other member/s until it is almost too late.

In committed relationships and families, it’s far better to schedule a time to talk openly about finances and not leave the burden on one person.

It’s also much healthier if one person is not taking control of all of a household’s finances either.

Sharing information and responsibility is a better strategy.

What can you do about being in mortgage stress? 

If you are obviously under mortgage stress there is one golden rule: do not ignore it.

The consequence of hoping it will go away become severe and very quickly losing your home is a realistic outcome.

First, you should speak to your lender or mortgage broker and try to make temporary arrangements. Ask for help.

The bank doesn’t want you to default on your mortgage and they can try to pull a few levers to try and make sure this won’t happen.

They are obliged to offer hardship assistance and be flexible around repayment arrangements, at least temporarily.

But you still need to make up for the shortfall.

You are likely to need financial counselling help too.

A great place to start is the National Debt Helpline on 1800 007 007 which can help you find a free (government-funded) financial counsellor in your local area.

The National Debt Helpline has several practical solutions which you can read through but it is strongly advised to make contact and work through your specific circumstances with a financial counsellor.

Uni students to become more debt laden

University students will feel the pinch even more as the indexation rate applied to HECS–HELP loans has jumped from 1 June 2022 to 3.9 per cent (0.6% per cent in 2021), the highest rate in a decade.

With today’s degrees costing between A$23,000 and A$43,000, this is a significant impost for someone coming into the workforce starting on an average graduate wage, in most cases reported as in excess of $70,000.

The inevitable resulting financial stress makes it essential to learn how to budget, control spending and set goals with your money.

We’ll return to those themes. But it’s important to understand how the HECS-HELP scheme works and the real impacts it is having.

HECS-HELP debt has to be repaid through the taxation system once your repayment income is above the compulsory repayment threshold, even if you are still studying. The compulsory repayment threshold is adjusted each year.

For the 2021-22 income year, the compulsory repayment HECS-HELP threshold is $47,014.

Laura Irwin, a Sydney University student who is in her final year of a Bachelor of Arts majoring in International Relations and Philosophy is disappointed with the recent rate increases.

“It’s disappointing. I suppose it is inevitable – everything is going up – but considering three-quarters of my university education was conducted online, I feel cheated,” she said.

“I’m essentially paying for YouTube and a piece of paper, not the quintessential university experience the past generations received.”

“I have not started repaying my HECS debt which is currently around $22,000 with another year to go,  I just can’t afford to. I work on a casual basis as a Fit Technician at The Athlete’s Foot and a payroll assistant at Pharmacy Phusion to make ends meet.”

“I also received the Youth Allowance during 2020-2021 while I was living out of home, but those payments barely covered the rent.”

“The HECS debt is around the cost of a small car, but the idea of needing to pay it off does worry me.  I don’t know how I’ll be able to continue paying living costs and have some type of social life whilst paying off the debt.”

Laura feels she isn’t that badly off compared to some of her friends who are doing science-based degrees.

“Some of my friends are really feeling the weight.”

Studying a science degree costs around $50,000, and if you have the marks and desire to become a doctor, there is another $86,000 over 4 years.

According to the ATO, outstanding HELP debt currently stands at $66 billion of which the 3.9 per cent increase will be applied. Research by Finder in November 2021 found that 28 per cent of Australians – equivalent to over 5.4 million people – still have debt in student loans.

With the size of student loans growing and showing no sign of slowing, it’s easy to see where this is headed. Graduates seem certain to arrive in their careers burdened by financial stress, the single biggest cause of stress for Australians.

In the United States, the situation is even worse.

The latest student loan debt statistics for 2022 show that there are 45 million borrowers who collectively owe approximately $1.7 trillion in student loan debt. Student loan debt is now the second-highest consumer debt category — second only to mortgage debt and higher than debt for both credit cards and auto loans.

Living costs in Australia are escalating and the forecast is more of the same.

If you are a student doing full-time study living out of home, as Laura is, not only is your HECS debt 3.9 per cent larger with electricity prices increasing 18 per cent from 1 July 2022, and shopping at Coles or Woolworths rising 12 per cent throughout 2022, this is a lot to sustain for any student.

“There should be some HECS debt relief like a 2-year indexation pause, not large increases” Laura says.

There are actions students can undertake to help manage financial stress says Andrew Fleming, Founder and CEO of Financial Mindfulness.

Budgeting, controlling spending and setting goals are the three key positive actions Uni students can do. “

So why budget?

Instinctively, we know that budgeting allows us to manage money wisely, avoid financial stress, and be in control.

The simple answer is that it’s a habit that is always helpful to our financial situation.

Here are some first-person perspectives on what budgeting did for people:

Andre, 28 of Bunbury, Western Australia admitted he had never known what he was really spending.

“I started seeing just how much I was really spending on my lifestyle, and it was a sobering experience,” he said.

“I also wanted to save for an overseas holiday but couldn’t make it happen as I didn’t have enough money.”

Melissa, 29, from Brisbane, said budgeting was finally enabling her to save.

 “I now have made changes on how much I spend on eating out and catching Ubers,” she said.

“It was great to feel in control of where I spend my money now and how much I will have left,” added Phil, 46, from Sydney.

Lisbet, 40, Adelaide said budgeting allowed her to understand how much interest she was paying on her card.

“I now manage my spending to avoid paying credit card interest, and this has saved me a lot of money,” she said.

Controlling your spending sounds simple, but let’s be honest, without a budget; you are more likely to over/impulse spend.

You’re trying your best to make good choices, with a rough idea of how much you can spend.

But without actual financial boundaries, it’s easy – and extremely common – to spend more than we meant to.

It feels like a kind of freedom to splurge, and spend without worrying – buying a shiny new pair of shoes, that next level smartphone, taking a cab over a bus, even just getting an extra dish when ordering takeaways.

We don’t want to see these choices as actually creating our financial reality. But when you sit down and discover you have taken 10 cab trips in a month or bought takeaway dinners 14 times, the cost adds up, and the areas you can cut costs become apparent.

In other words, budgeting makes us aware of unconscious and unhelpful choices with money. It gives us control over these self-defeating behaviours.

Setting goals also sounds simple. It seems easy to set goals; it’s a creative exercise that seems responsible and feels good too. You settle on a goal and work out a timeline.

But achieving a goal is difficult – or everyone would be kicking financial goals all the time. And we are not doing that.

Budgeting is an essential part of achieving any personal financial goal. You’ll find it challenging to commit to any financial goals without budgeting.

A budget allows you to reverse engineer your goals via a clearly defined process. It keeps you on track, day in, day out, week in, week out, month by month. Each budgeting action is a recommitment to your goals.

Over time, the benefits of budgeting help you achieve financial goals and ensure there is money left over which helps reduce financial stress.


Can you actually afford to buy?

There is so much pressure to buy a home to enter the property market these days that renters could be forgiven for experiencing a sense of failure if they are not planning to buy.

We have recently covered how renters can avoid that sense of financial failure.

But with even the Prime Minister apparently talking up buying as a solution to renting, the pressure to buy is powerful.

When asked why there wasn’t more support for renters in the 2022 Federal budget, Scott Morrison suggested buying should be people’s objective.

‘The best way to support people renting a house is to help them buy a house,’ Mr Morrison told The Today show.

The government’s 2022 Federal budget materially supported this objective by expanding the home loan guarantee scheme, which now allows people to borrow up to 95 per cent of the value of their property without having to take out mortgage insurance.

But with so much noise apparently nudging people to buy, how can you be sure you – with your finances, personal and job situation – can actually afford to buy a home?

Is buying always best?

Hamish Ferguson says it is not always correct that buying is better for everyone.

“It is good for some people but depending on the person it is not always best.”

People have many different reasons for renting – often because they are only in a town temporarily.

Owning a home is a huge commitment, often a lifelong one and it doesn’t guarantee financial success when you sign a contract.

In fact, any big contract that involves large sums of money requiring a long-term commitment to make repayments is inherently a financial risk.

You need to be well prepared to enter such a contract and have contingency plans in case your personal situation changes.

The reality is if someone is not really ready to buy, that renting – within your means and with a savings goal – is by far a better option than scrambling to buy a home and that could instantly put you into mortgage stress.

Mortgage stress is most commonly defined as a household spending more than 30 per cent of your pre-tax income on home loan repayments.

It’s also important to remember the upsides of renting when balancing up a choice:

The benefits of renting include:

    • More freedom to travel the country and the world;
    • Less of a financial commitment, especially upfront;
    • No maintenance costs or repair bills;
    • No property taxes;
    • Greater ability to reduce living costs if your situation changes; and
    • You are likely to have more disposable income.

Peer pressure in buying property ?

There’s often a perception that the decision about buying property only comes down to the lender – and that if you can buy, you should.

It’s true that the bank greenlights your loan and your mortgage, but there’s more to it than that.

Peer pressure can make people buy property they actually are not suited to.

This is a real thing. Aussies feel peer pressured into anything from splitting bills to buying property.

Eight per cent of Australians feel they have bought property because they felt pressured.

The peer pressure could be about the location, the commitment to buy or the style of home.

For instance, you might fall for an older property because you long to renovate, but just because you can get the loan doesn’t mean you should.

“An older property needs to be considered much more carefully as it is likely that you will need to contribute a higher amount to maintenance over the life of the property than a new property,” Mr Ferguson said.

Pre-approval from a lender is good, making sure that you have disclosed an accurate estimate of your cost of living, realistic estimation of the rent that the property will generate.

‘But you also should have had a good think about major expenses that might come up over the next few years and ensure that you can afford the property taking this into consideration.”

Red flags that mean you may not be able to afford to buy

Whether you can afford to buy should be influenced by a range of factors including:

    • Your health and that of loved ones;
    • Whether your employment is stable;
    • The likelihood of increasing or losing income;
    • Having a family, schooling;
    • The stability of your other financial commitments, i.e. business ownership;
    • Changing market conditions; and
    • Additional costs above the purchase price.

In May 2022, the Reserve Bank of Australia (RBA) increased interest rates by 0.25% to 0.35%. The last time interest rates were increased was in 2007 by 0.25% to 6.75%, that is 15 years ago.

That year Steve Jobs released to the world a new product called the iPhone. A generation of new borrowers have not experienced a rate rise, only rate cuts.

The May 2022 rate increase is just the beginning, some experts are predicting a further six interest rate rises in the next two years and for consumers to take into account a doubling of interest rates.

It’s important to have enough flexibility to cope if your personal conditions change – or if market conditions keep changing.

‘I recommend that you can still afford the property at 6 per cent interest rates,” Mr Ferguson said.

On the average Australian home loan, which is currently $595,000, an extra three per cent would cost over $1,000 extra for each monthly repayment.

It would add up to nearly $400,000 extra over the course of a 30 year home loan.

Mr Ferguson says a buyer needs to take into consideration other costs such as insurance, rates and maintenance over time.

“This can depend on the area and type of property, however I would suggest that a $1.5 million property that is more than 20 years old will probably cost between $15,000 to $20,000 per annum to maintain.

“Possibly allowing 1 to 1.5% of the property value might be a reasonable level.”

What is the minimum amount of time a property investor should stick with a property?

“There are different schools of thought on this however my suggestion for clients is that a 10-year time frame as a minimum should be considered,” Mr Ferguson says.

“Generally the more regional the property being purchased, the longer the period that the property should be expected to be held.”

Keeping up with the Joneses

In a recent article on how renters can avoid fear of financial failure we referred to the pressure people feel to stray into unhealthy spending patterns out of the type of peer pressure known as ‘keeping up with the Joneses’.

“You can avoid the mindset traps by not thinking that you have to ‘keep up with the Joneses’ and realise that often the picture people show is not the real or true picture,” said Hamish Ferguson, a director of Vision Property and Finance.

First, a quick refresher on what the saying means.

Keeping up with the Joneses is a common saying referring to the comparison to one’s neighbours as a benchmark for the accumulation of material goods or status.

To fail to “keep up with the Joneses” is perceived as demonstrating financial and/or cultural inferiority.

It comes from an American cartoon strip of the same name which started over a century ago.

Most of us like to think we are independently-minded enough to avoid falling into traps like this.

But as with the belief that most of us see ourselves as “above average” drivers, we tend to overstate our abilities.

As a result, we can easily avoid helpful behaviours like budgeting and slip into mindless spending and financial stress.

New research by Finder shows it’s that’s not the case that most of us avoid the ‘keeping up with the Joneses’ trap.

A national survey of 1,000 people found 47% of Aussies have felt pressured to spend money by their social circle.

The research found 1 in 5 (22 per cent) accumulated debt or spent more than they could afford because of the pressure to spend – equivalent to 4.3 million Australians.

Aussies feel peer pressured into anything from splitting bills to buying property.

More than a quarter of Aussies (28 per cent) have felt forced into splitting a restaurant bill evenly, when they had ordered less food than others.

The gender split on this ‘keeping up with the Joneses’ behaviour may not automatically confirm stereotypes.

The research showed men ($1,560) have overspent substantially more than women ($912) to keep up with friends and family.

Finder’s Katie Browne attributes some of how we handle peer pressure around money to the fact that it remains a taboo subject.

“Unfortunately money can cause rifts between friends and families at times,” she said.

“Everyone has different incomes, money values, and financial priorities and finding the spending sweet spot with friends can be a tricky situation to navigate.”

The research showed 1 in 7 (14 per cent) people have been coerced into going on an expensive holiday with loved ones.

A further 9 per cent have felt they had to fund a bucks or hens night, while 7 per cent have felt pressured into paying for someone else’s baby shower.

Some Australians even admit to buying expensive items like a nice car (8 per cent), a home (8 per cent) or designer items (8 per cent) to keep up with their friends and family.

Browne said feeling guilted into spending more just to keep up with friends is an easy way to blow your budget.

“While no-one wants to be a party pooper, consider suggesting a more affordable alternative when you are invited to a fancy dinner or on a pricey holiday. You can always be honest with your loved ones and say while you value spending time with them, you don’t want to spend too much money doing it.

“Money management apps – like the Finder app – can help you see your income and expenses all in one place and figure out how much you can afford to spend.

“At the end of the day, it’s your money and you get to decide how you spend it. If your friends are good friends they’ll want to see and spend time with you – and the location really shouldn’t matter.”

Millennials are the most vulnerable to financial peer pressure, with 69% having spent money because of social influence, and 36% admitting they’ve gone beyond their financial limits to do so.

Kate Browne, personal finance expert Finder, said money is still a taboo topic for many.

“Unfortunately money can cause rifts between friends and families at times.

“Everyone has different incomes, money values, and financial priorities and finding the spending sweet spot with friends can be a tricky situation to navigate.”

The research shows 1 in 7 (14%) people have been coerced into going on an expensive holiday with loved ones.

A further 9% have felt they had to fund a bucks or hens night, while 7% have felt pressured into paying for someone else’s baby shower.

Some Australians even admit to buying expensive items like a nice car (8%), a home (8%) or designer items (8%) to keep up with their friends and family.

Browne said feeling guilted into spending more just to keep up with friends is an easy way to blow your budget.

“While no-one wants to be a party pooper, consider suggesting a more affordable alternative when you are invited to a fancy dinner or on a pricey holiday. You can always be honest with your loved ones and say while you value spending time with them, you don’t want to spend too much money doing it.

“Money management apps – like the Finder app – can help you see your income and expenses all in one place and figure out how much you can afford to spend.

“At the end of the day, it’s your money and you get to decide how you spend it. If your friends are good friends they’ll want to see and spend time with you – and the location really shouldn’t matter.”

Millennials are the most vulnerable to financial peer pressure, with 69% having spent money because of social influence, and 36% admitting they’ve gone beyond their financial limits to do so.

Have you ever felt pressured to do any of the following with friends/family?
Split a bill evenly at a restaurant when you ordered less


Go on an expensive holiday


Buy concert/festival/sporting event tickets


Pay for someone’s bucks/hens night


Buy a house/apartment


Buy a nice car


Buy designer items


Pay for someone’s baby shower




None of the above


Disorganised finances part 2 of 2: Practical tips to organise our personal finances

In part 1 of this series on disorganised finances we looked at the importance of paying attention to your personal finances and how mindfulness is the ideal tool to help you make this shift.

Once you are paying attention you become aware of the reality of the situation you are in you will probably find several issues that need addressing. These could include:

These are all complex and multi-faceted challenges that need separate strategies and time to address properly.

They are all issues that Financial Mindfulness looks at regularly both here and in the content within the app.

In part 2 of this series on disorganised finances we take a step back to try and address some fundamentals you’ll need to improve your situation.

We run through some of the golden rules for returning disorganised finances to an organised state and then look at the ‘fatal flaws’ for our hopes of staying organised in the future.

These guidelines have been provided as suggestions by some Financial Mindfulness’s highly experienced experts.

Time to face reality

You’ve presumably read this far because you know there’s a problem with your finances so you’ve already made progress.

Well done on that step and your willingness to face up to problems.

The first issue to face up to is debt: a pattern of being in debt often creates financial stress.

We need to get real around debt – as quickly as possible.

Not all debt is bad of course – if it is debt incurred to build a positive long-term goal or as a solid investment, it might be useful.

The problem occurs when we begin to accumulate multiple debts and ignore the red flags around those.

So we need to identify and detail all debts, seek help – urgently if need be – and build a plan to reduce those debts.

Maintaining a mindful approach to money will help us stay in reality about money – and this needs to be our new default: being in reality about money every day, every week.

At Financial Mindfulness we define being mindful about finances as being aware and paying attention to your finances, and that may mean seeking help.

Get your mindset and motivation right

To become organised, you need to see being organised as an important thing to do, says Hamish Ferguson, a director of Vision Property and Finance.

This means connecting on a daily basis to your purpose around money. You’ll need that motivation to sustain changes in your habits and behaviours

It’s also crucial know your underlying mindset.

One of the most persistent and pernicious reasons our financial goals fall away, we lose motivation, or we never seem to get ahead is our mindset.

“We always have more options than we often realise but if we have a negative mindset, or scarcity mindset, we’re not likely to recognise or see the opportunities that might be right in front of us,” says money behavioural coach Lea Clothier.

Our core beliefs about money can be very deep-seated. Uncovering them and developing a more positive outlook on money may take extra support, for example from a financial therapist.

Mr Ferguson, suggests says one way to help unlock our real mindset is to write a list of the benefits of not being disorganised and share it with someone you are prepared to be accountable to.

Keep revisiting this on your journey towards becoming better organised.

Set some positive financial goals

Mr Ferguson, part of the Financial Mindfulness team, suggests setting some achievable goals around your finances is important.

“These should be goals that would help you feel good about your circumstances,” he says.

Examples might be building savings of 2 months’ worth of expenses, or paying off a credit card and allocating the money towards savings or a buffer.

What happens if we’ve set a goal and we break promises to ourselves and a goal suddenly looks unachievable?

What is the first thing to do when we ‘fall off’ our goals and they suddenly appear unrealistic?

With goals related to money, it’s essential to do a little self-examination to stop any negative patterns taking hold that might lead to financial stress. These patterns might include compulsive spending as a coping strategy.

Firstly, it’s important try not to abandon a goal just because it didn’t work out perfectly, or even if it seemed to fail entirely.

The reason for having that goal may still be sound.

It sounds obvious, but don’t give up! Regret over failure is far harder to deal with than the failure itself.

Really, falling off a goal creates a valuable opportunity to learn and grow – new skills and the resilience to cope with future setbacks.

You can read more about revisiting your goals if they don’t seem to be working here.

Don’t try to change your world on day one

Ms Clothier, who is part of the Financial Mindfulness team says it’s important to ‘start small’.

Choose one area that you can become better organised.

Perhaps it’s organising your filing system, or becoming more organised with bill paying, or cleaning out your wallet.

“Finish that one task, then move on to the next,” she says.

“It will be less overwhelming and you’ll create momentum as you complete each task.”

Ask for help. If you’re not sure, ask others what they do? How they organise their finances or what apps they might use etc.

Once you’ve sorted them, keep on top of your finances on a weekly basis.

“Putting in a few minutes each week is much easier than taking a few hours each month, which can become daunting,” Ms Clothier says.

It will be easier to keep track of and stay organised if you do a little bit, often.

Clean up your admin to reduce shame around money

 Boring yes, but important? Absolutely crucial.

A basic as it sounds, getting organised starts will filing.

Set up a filing system – in your computer or online – to arrange all financial documentation be it electronic or paper.

Start with getting those bills organised into categories, e.g. Utility bills (electricity, gas, etc) in a separate folder.

Create folders in categories that mean you are more likely to pay attention to them – and not be able to ignore them.

A tidy system with money actually reduces our shame around money, which is incredibly valuable.

That in turn reduces the belief that we might not ‘deserve’ to have positive experiences with money.

Budget early and budget often – just do it!

 Instinctively, we know that budgeting allows us to manage money wisely, avoid financial stress, and be in control.

The simple answer to ‘why budget’ that it’s a habit that is always helpful to our financial situation.

Setting up the simplest of budgets is a big step forward to managing weekly, monthly and yearly expenses.

It’s important to note that budgeting is not easy. It is a commitment to a new way of thinking about money, and it adds a whole new layer to how we interact with money.

Budgeting is a high-level mindful money practice – it’s paying attention to what we earn, what we spend, what we need and our attempts to change for the better.

Succeeding means not giving up in the pursuit of this new life skill.

The proper motivation is needed to undertake this skill of being constantly curious about your money.

To make budgeting work you need to return to it every day to begin with, then at least every week – for a long time.

Budgets only work if they are realistic and if they are ‘live’ systems – so they need to be integrated into your daily life, reviewed and revised if they are not working.

Eventually you can review and revise your budget monthly.

Basic budgeting steps include:

    • Properly determining your household income;
    • Begin tracking your living expenses;
    • Balancing the budget;
    • Go back and review your expenses;
    • Review your income potential; and
    • Balancing the budget – yes again.

To learn more about how to budget, read on here.

An overlooked but essential element of budgeting is simply making time for it. Sounds obvious but it’s a budget killer.

“You must allocate a regular time to review what you have spent money on and what expenses might be coming up that are large or lumpy,” Mr Ferguson says.

We also have produced detailed material about maintaining a budget which you can find here.

The steps to maintaining a budget include:

    • Schedule your budgeting practice;
    • Make budgeting a game that you ‘win’ at;
    • Review the value of your money and simplify your budgeting;
    • Get smarter about your use of credit;
    • Get real about planning;
    • Experiment with ‘not spending’;
    • Nominate a budget buddy and get accountable; and
    • Become proactive – and stay positive.

Take the ‘risk’ out of your regular bills

Paying bills – including card and loan repayments, energy bills, groceries and other recurring obligations – are among our followers’ main contributors to financial stress.

For people who cannot ‘get on top of’ regular bills they are things to worry about, instead of what they should be: transactions that buy us safety, enjoyment or investments in our future.

When we are not clear or organised with bills they can become risks.

Not all bills are created equal. There are basic but significant differences many of us don’t consider when managing our money.

We need to learn the difference between regular and variable bills.

Some bills recur at the time for the same fixed amount (with perhaps usually small incremental increases). These include mortgage, rent, rates, insurances, car registration, school fees and health insurance.

Other bills are variable, meaning the payable amount and date due can changes significantly.

These include servicing a car, paying for trades to fix something in your home.

Even though you know they are coming, you won’t know exactly when they will occur or how much they will be. A vital first step in managing bills is to identify the difference: which bills are for your needs and which are for your wants.

Think carefully about this: is the bill for something you want or need?

Once you had done this background work, it’s time to set up a crucial action plan.

To get control of household bills it’s important to have a full master list of bills – including regular and variable. Note the likely amounts payable and likely due date.

Consider taking some time to think about those items that are essential, but not regular. Think about the frequency that you would like to plan for those items and what amounts you might need to put aside

At the beginning of each month, create a checklist (separate from your master list) of the bills you are expecting to pay and the approximate amount.

It is wise to do this not just for the current month but the following month as well.

This list can be handwritten or electronic. Allow space on your checklist to mark if the bill was received and when the bill was paid.

Ideally this is what you would do when bills arrive – either in your mailbox, inbox or by SMS notification.

    • Don’t ignore your bills.
    • When they arrive open them.
    • Read and ensure you understand them. Is the bill correct according to your records?
    • Check the amount and time to pay.
    • If it’s urgent, pay it as a matter or urgency.
    • Keep all your bills together so it’s easier to keep track of them and pay them.

Set aside some time each month to pay your bills in line with how often you get paid. An hour is usually enough.

Bills need to be paid on time – this is an absolutely critical point towards helping you get organised.

“As you have organised all bills into separate folders, create reminder’s to pay before the due date,” says Andrew Fleming, Financial Mindfulness founder.