25 August, 2022

5 tips to help if you're in financial distress

With interest rates going up and inflation higher than it’s been in a long time, financial stress is rife.

Most of us have felt financially stretched at some point. But there’s a big difference between downgrading this year’s holiday and not knowing how you’ll pay this month’s power bill. 

While we generally think of financial stress as a barrier to paying bills, it also significantly impacts your relationships and mental health. This can lead to sadness and depression, reduced motivation, and underperformance at work.  

Thankfully, there are steps you can take to feel more in control of your finances, so you can get your life back on track when things go wrong.

1. Look at where your money’s going

Facing your financial situation head-on can be confronting, but burying your head in the sand won’t help either.

If you haven’t already, create yourself a budget. Whether you use a spreadsheet, a budgeting app, or MoneySmart’s Budget Planner, a budget will give you a clear picture of your incoming versus outgoing expenses. This could help you to spot a few areas to cut back on.  

For some simple ideas on how to spend less on food, read our 7 tips to save money on groceries.    


2. Prioritise your debts 

If you owe money, prioritise your debts in order of importance. The National Debt Helpline, a not-for-profit service that helps people tackle their debt problems, suggests paying bills in this order:   

  • rent or mortgage payments 
  • council rates or body corporate fees 
  • car payments for a car that’s essential for work , getting essential goods or medical appointments
  • energy and water 

3. Save money on power bills 

One of the biggest drains on household budgets is the power bill. The Department of Climate Change, Energy, the Environment and Water (DCCEEW) suggests five simple ways to save energy and money in your home.

  1. Call your energy retailer and ask if you’re on the best deal or whether they offer any rebates or assistance. 
  2. Consider switching energy retailer if this means saving money if you can. 
  3. See if there are any rebates or assistance you can access from governments across Australia. Your local council may also offer rebates and assistance. 
  4. If you’re having difficulty paying your power bills, ask your energy retailer if you can go on a hardship plan. Going on a payment plan could protect you from disconnection, interest payments and late fees. 
  5. Save money by reducing your energy use. Read more about ways you can save. 

4. Ask for help 

If you’re struggling to keep afloat, it’s important to know you’re not alone and that help is at hand. In fact, the sooner you seek help, the better. 

The National Debt Helpline can provide free independent, confidential advice from professional financial counsellors. The service is available on 1800 007 007 from 9.30am to 4.30pm, Monday to Friday.  

If you’d prefer to self-serve, the National Debt Helpline offers step-by-step guides explaining how to fix common debt problems. This includes what you can do if you can’t afford to pay your power, internet or phone bills, mortgage, credit cards or payday loans.  

They also offer advice for more complex situations that contribute to financial difficulties, such as family violence, natural disasters, mental distress and facing or being in prison. 

5. When you’re able to, build a savings buffer 

Life happens. Pets get sick. Cars break down. Heaters need replacing. Laptops glitch out. Having an emergency fund can provide you with a financial safety net for those surprise bills. So, once your finances are back on track, try regularly putting aside a little money to build yourself a buffer. 


It’s normal to feel overwhelmed when money is tight, but it’s important not to ignore the problem.  

By sitting down and facing your financial problems head on, you’re taking the first step in regaining control of your finances.  

Importantly, you’ll regain your confidence and feel more relaxed knowing you can handle any financial potholes that might pop up in the road ahead.   


Consider the PDS and TMD available at before making a decision. Issuer is Motor Trades Association of Australia Pty Ltd (AFSL 238 718, ABN 14 008 650 628).  

We’re giving you this information in good faith. It comes from sources we think are reliable and accurate. However, we can't guarantee it’s right and don't accept any liability relating to the content or any linked external websites.