Managing Financial Difficulty

Many of us will suffer a financial crisis at one stage or another in our lives. Whether its overuse of credit, too many bills arriving at once, ill-health, losing a job, or an unusual turn of events, the reality is a financial crisis can happen to anyone.

How many of us:

  • have no particular budgeting strategy;
  • make impulse purchases outside of our normal budget;
  • make a large number of shopping trips that cost more than intended;
  • have no money set aside in case several bills were to arrive at once;
  • are forced to spend on unexpected bills during any given month e.g. motor vehicle repairs, breakages and urgent replacement of household goods. 

These sorts of money problems are spread throughout the community. Financial problems are found in all types of households, irrespective of peoples age, sex, marital status, occupation or income. Its not just a problem for the unemployed!

A large proportion of us are simply unprepared to handle a financial crisis. Some don't have the skills to manage their money prudently. Others ignore the warning signs and fall into a debt trap. Whatever the causes, the consequences can be devastating.

This section helps you to deal with a financial crisis. It provides practical information to enable you to take control of your finances and be better prepared for the unexpected. It also contains information on who you can turn to for help in sorting out your money problems.

As many people say, prevention is better than the cure. We can refer you to a Bridges Financial Planner for expert advice on managing your superannuation, saving for your retirement or investing your redundancy payout. They will help you to make sensible long-term financial decisions. However, if you are already finding it difficult to cope with day to day financial pressures, you should consult a Financial Counsellor who is trained to help you resolve current money problems and put you back in control of your finances.

  1. Draw up a budget which has saving goals and spending priorities and stick to it;
  2. Save an emergency fund equal to three months income;
  3. Avoid impulse purchases and frequent shopping trips;
  4. Use your own money to pay for goods and services as much as possible e.g. cheques, debit cards or Visa debit cards are convenient ways of accessing your funds;
  5. If you have a credit card - pay the balance off each month especially after New Year;
  6. If you regularly carry a credit card balance over from one month to the next, make sure the interest rate on the card is reasonable;
  7. Avoid department store credit cards which normally charge higher interest rates;
  8. Reduce the number of credit cards you have;
  9. If your pay is deposited electronically into your account, ask to pay your loan automatically;
  10. If you have several loans including lots of credit card debt, consider consolidating the loan balances into one personal loan this will give you the opportunity to clear the debt, with one set of repayments, over a fixed period of time. Learn more about our Personal Loans.

If you are experiencing problems, talk to your creditors straight away. You may feel awkward and embarrassed, but it is important to let your creditors know what is happening. Most creditors will be pleased you have called to inform them about the situation. When they haven't heard from you, they will think the worst. Avoiding creditors only puts them off side. Before you talk to them, sit down and work out what you are going to say. Take the time to think about what money you have coming in and what money you are spending. Prepare a money plan so you can make an offer to your creditors that is realistic and within your means.

Don't make promises you can't keep. It will make negotiation that much harder in the future. You are not alone. Removing the fear of a financial crisis should be an important priority for all of us. Unfortunately, crises will happen so it's best to have a sound budget and savings goals that can cope with life's emergencies. 

Our savings options include:

The Credit Union is owned by its members. We put your interests first!

To help you work out a savings plan, you can utilise our online savings calculator which takes into consideration all of your general expenses and gives you an idea as to how much you could be saving.

Questions?