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Managing Financial Stress with Inovayt

Inovayt, who are also the team behind RBK Wealth and Finance, are our go-to partners when it comes to all things financial planning and mortgage broking. This month, we asked the team to give us the low-down on dealing with financial stress and worry.

Do you find logging into your online banking app before payday stressful? You’re not alone.

Research states that many people would rather ignore their finances and bury their head in the sand than identify and deal with the issue at the core of their stress.

Ignoring your bank accounts disconnects you from your money which ultimately leaves you worse off.

The Core Data/Financial Mindfulness Stress Survey found that money stress, more often than not, leads to feelings of anxiety, fear and depression. It also found that 75% of people argue with their partner about financial pressure. We’ve all been there and we’d all like to avoid it as much as possible. We feel you!

Fortunately, there are some simple ways to avoid money worries getting the better of you, and seeping into other areas of your life.

Control your cash flow and live within your means

You get taught this in Year 10 money management and it really is the golden rule, but as adults so many of us don’t stick by it. Start by ensuring your monthly expenditure doesn’t exceed your monthly income. Although this sounds like a no brainer, according to the Household Financial Comfort Report, 1 in 10 people spend more than their income every month.

Let your regular expenses dictate your budget

Create a financial structure that manages your cashflow. For most people, the majority of their expenditure is predictable:

  • Weekly groceries
  • Petrol
  • Mortgage repayments
  • Phone bills
  • Internet bills
  • Utility bills

These expenses typically make up 60-70% of our expenditure and can be budgeted for from a dedicated bank account. Once you’ve got this structure in place it makes allocating the rest of your money much easier.

Don’t let your irregular expenses cause a blowout

While it’s all well and good to manage your regular expenses – it’s things like holidays, gifts, entertainment, clothes and household goods that get people in trouble, because they’re ad hoc and unpredictable. We all love to treat ourselves but sometimes those shoes or that surprise weekend away just can’t be justified!

Rather than put these expenditures on credit card, a better practice would be to regularly set money aside for this type of expenditure and commit to only spending what you have.

There’s no doubt that getting on top of your finances and maintaining a sustainable cash flow will decrease stress when it comes to money. It can also snowball into an increase in capital and an opportunity to consider an investment strategy to build your wealth.

If you’re considering investing or require more information or clarity on any of these topics, reach out.