How to battle financial anxiety in an age of redundancy

In a time of rising interest rates, soaring energy prices and ballooning grocery bills, economic anxiety is a feeling that far too many people can relate to.

And with many companies nursing a post-pandemic hangover by handing down mass staff layoffs, many Australians are feeling the looming threat of financial insecurity.

In a time of rising interest rates, soaring energy prices and ballooning grocery bills, economic anxiety is a feeling that far too many people can relate to.Credit:Gabriele Charotte

Although we are certainly not alone in our financial woes – a recent study found one in four Australians are finding it difficult to get by on their income – it still leaves many feeling paralysed, disempowered and unsure how they can protect their financial future.

My mantra? Action cures fear.

Go back to basics: While it might seem rudimentary, the humble budget can do wonders to get you on the right track. Taking the time to sit down and list out all your expenses is the best way to understand your financial situation and empower yourself to set and meet your financial goals.

By looking at your financial situation as a whole, you can start to redirect any unnecessary spending to a rainy day fund.

But being realistic is key. We all have spending habits that bring us joy but might not be 100 per cent essential. As long as you’re firm with your goals, allowing yourself to enjoy your morning coffee will make your financial goals feel far more sustainable.

Plan for redundancy: Redundancy is not a word anyone wants to hear, but it is a reality that many Australians will face in 2023. According to one report, 30 per cent of large businesses say they are likely to make redundancies in the 2022-23 financial year due to the impact of global events on their bottom line.

If you’re worried you might be caught up in the wave of redundancies, padding your personal runway – that is, the amount of time you could survive off your savings – is the best way to safeguard your financial future.

In the event of job loss, having three months’ worth of living expenses set aside will give you the space to seek employment without the looming pressure of financial stress. This will help to stave off the ‘what-ifs’ and alleviate financial stress if redundancy becomes a reality.

Shed the shame: Even at a time when most people are feeling the pinch on their pockets, the topic of financial stress is still shrouded in shame. A national survey by Finder revealed that 14 per cent of Australians admit to lying to a partner about their finances, with feelings of shame and anxiety around poor money management as the catalyst.

Shame around money does nothing but disempower us from taking control of our financial future. Talking to a qualified professional about your particular situation will help to remove the barrier of shame that often stops us from addressing the issue head-on.

A financial advisor can give you reliable advice that will benefit your goals, whether it be helping you to save for potential job loss, minimising debts, or maximising your savings. Shame only feeds into the spiral of financial insecurity, so stepping out of that cycle is essential to building a more stable future.

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. Investors should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

Shivani Gopal is the CEO of Elladex and an expert in money and inclusion.

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