Why Australians on huge salaries are still stressed about money

Cost of living in Australia is getting out of hand with a report from AMP demonstrating just how bad it has got.

According to the 2022 Financial Wellness report from AMP, almost three million Australian workers are feeling moderate or severe levels of financial stress.

This isn’t just limited to people on low incomes, with one in five workers earning $100,000 and above also suffering from financial stress.

Getting all the things you want from your money can seem impossible.

We tend to focus on the things we want but don’t yet have, the dream home, the cracking share portfolio, a low or no mortgage, or the cash buffer to take some extended leave.

The flow on impact is costly, with one in five Australians reporting financial stress impacting workplace productivity. Worse, 25 per cent of Australians report not enjoying life because of the way they’re managing money. And financial stress is on the rise, with the cost of poor financial wellness in Australia more than doubling in the last two years to a staggering $66.8 billion.

The trend is a scary one, so what can you do about it?

How to improve your financial wellness

Most people think that choosing good investments is the key to money success and financial peace of mind. And choosing good investments is important, but it’s a small part of what you need for real success.

Being truly successful with money and driving real financial wellness is about investing the right amount at the right time. It’s about optimising for tax. You want to use the right amount of leverage. You need a good debt strategy. You also need to have the right approach to your saving and day-to-day money management.

Don’t let worrying about money get in the way of your work. Picture: Tim Gouw, Unsplash.

You also need to manage risk well, and have a plan that never sees you forced to sell good investments at the wrong time. You need to have good goals and targets and keep yourself motivated to get there, so you build confidence and avoid money stress.

Sure, choosing good investments is important – but it’s less than half of what you need to get right if you want to come close to achieving your financial potential and creating lasting financial confidence.

Urgent vs. important

Money success and financial wellbeing (unfortunately) isn’t something that will just happen on its own. Money is important, but it’s also rarely urgent.

It’s easy enough to not make the time today for your money without too much of an impact today. Just like skipping a session at the gym, treating yourself to a third helping of dessert, or not taking the time to do that bit of research or study to develop your professional skills or career, there’s no earth-shattering immediate impact.

But if you repeat these behaviours every day for years, things start to decline. The decline is slow at first, but if you let it get to a tipping point things can begin to deteriorate rapidly. Making the time to keep your money moving forward is something that’s easy to put off for a tomorrow that never seems to come around.

On the flip side, once you start taking action you start building momentum. You start building habits and behaviours that drive results. Then these results drive motivation to keep going, and take your results to the next level.

Small actions each day will help towards building better financial wellness. Picture: Unsplash.

The more I think about money, the more I come to realise there’s so much similarity between being money fit and being physically fit. Your previous choices around your diet and exercise routine dictate your current level of physical fitness and health.

Once you build new habits and behaviours that have a positive impact on your health, you start making progress. Money is exactly the same.

If you’re already doing OK, giving this time and attention will take things to the next level. If you’re a little out of shape, you need to rebuild habits and behaviours that will get things back on track so you can then take things to the next level.

Just like your physical health, there are no shortcuts to money success. The financial equivalent of a fad diet or tummy tuck might deliver some quick results, but if you don’t have the right foundation, approach, habits and behaviours, any benefits will be short-lived. You unfortunately can’t shortcut your way to real long term money success.

Spending a bit of time to organise your money will lead to strong results. Picture: iStock.

Measure backwards

Instead of just focusing on what you haven’t done or what you don’t yet have, celebrating the progress you’ve made goes a long way to reducing financial stress.

You should measure backwards – looking at your money wins over the last month, three months, year, five years. You’ll likely be pleasantly surprised.

Then you want to give yourself a solid pat on the back. If you’re doing really well, it’s important you recognise that so you can celebrate your success. This will in turn give you more motivation to keep following the path.

If you’re not on track, that’s not ideal but also OK. Money plans don’t work for three main reasons: you’ve done something wrong, there was something wrong with your plan, or something has happened that was out of your control that has impacted your results.

You’ll want to figure out which one of these it is so you can address what’s happened. Once you do, you’ll be clear on what you need to do next, and again create the motivation to keep things moving forward.

The wrap

When it comes to your money and the lifestyle it allows you to live, it’s common to want it all – right now. Ultimately, anything is possible, but you have to put in the work (and the time) to get there.

If you’re stressed about money, and you’re constantly focused on what you haven’t yet done, the journey will be a frustrating one and it will be hard to keep up the motivation you need to get the results you want.

Take the time to understand what really drives money success, focus on the important but not urgent, and measure backwards, and you’ll go a long way to reducing your financial stress, driving motivation, and creating the confidence to move forward.

Ben Nash is a finance expert commentator, podcaster, financial adviser and founder of Pivot Wealth, the host of the How to be Successful with Money podcast, and Author of the Amazon best-selling book ‘Get Unstuck’

Ben runs regular free online money education events to help you make better money choices and get ahead faster. You can check out all the details and book your place here

Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstances before acting on it, and where appropriate, seek professional advice from a finance professional.