6 tips to take action in a financial emergency

Estimated reading time
 6 min

Learn how to

• Look at your current financial situation when an emergency happens
• Prioritise important payments
• Find support services to give you a helping hand

A financial emergency can happen to anyone at any time.

They can often result from an unexpected large expense or loss of income. Maybe your home was flooded during torrential rain and needs major repairs. Or the household breadwinner lost their job. Perhaps inflation and the rising cost of living mean making sacrifices you never thought you would.

If you find yourself fighting against a rising tide with your finances stretched to their limit, we’re here to help. Our tips on how you can manage your money will guide you when navigating these choppy waters.

Planning ahead can be a real lifesaver

No matter what stage of life you’re in, it never hurts to have an emergency buffer. You know, for those ‘just in case’ moments. Saving around three to six months of expenses is an ideal amount for your emergency fund.

But building this buffer doesn’t mean sacrificing everything you love – often making small spending tweaks can make a difference:

• Swap your daily purchases: Shake up your daily expenses with cost-effective swaps. For example, can you make your lunch at home and bring it to work? How about trialling home brand products over branded ones? A little change goes a long way. See how much you can save with our savings booster calculator.
• Cut back on subscriptions where you can: Chances are, there’s a free version of the app you’re subscribed to. Or you could cancel or pause your gym membership if you’re not getting there in person and watch online workout videos. Or maybe you can reduce the number of streaming services you’re subscribed to?
• Make the most of compound interest: Trust us on this one, it’s easier than you think. If you’ve got a savings account, you’re likely already earning interest on your interest. This can help you build up an emergency buffer faster and feel more secure when things go south.

6 tips to stay on top of your money in an emergency

When you’re facing a financial emergency, it can be easy to stick your head in the sand (ostrich style) and avoid the problem at hand. Here are six important things you can do to help keep your head above ground and on top of your money when life has been flipped upside down.

1. Check your budget

Your budget will be one of the first things to be affected when you’re faced with an emergency. That’s why it’s important to check in and see where you can be smart with your spending, like switching to buying groceries in bulk.

Consider reducing unnecessary expenses for the time being, like cutting back on food delivery services. Making small changes, even for a few months, can help you save some money.

2. Review your regular repayments

When things get rough, regular repayments can easily fall by the wayside. To stay on top of them, make a list of your essential payments and their due dates. This can be as simple as using the notes app on your phone or a spreadsheet – whatever works for you.

Contact each payee on your list and see if you can switch to a different payment option. For example, ask your energy provider to change the payment frequency so it’s better for your situation. Or you could ask a lender to pause payments on your loan until things are back on track.

3. Talk to your bank

At your bank, you’ll find the best people to help you in a financial emergency. They can ensure you’re able to meet financial commitments while managing the stress of an emergency. For example, your bank might change the payment frequency on your loan to better suit your current situation.

If you're an ANZ customer you’re struggling to meet your existing ANZ repayment obligations (including obligations for loans, credit cards and overdraft facilities), applying for financial assistance could be the right step. It’s extra support to help manage financial difficulty when you need it most. Find out more here.

4. Review your insurance policy

Depending on the situation you’re in, it’s always a good idea to review your insurance policies. This can help you work out what you’re covered for, if you can make a claim, and how much you’ll be out of pocket. For example, if you were robbed, or your home was damaged in a storm, you might be entitled to a payout from your homeowners’ or renters’ insurance. If you recently experienced a life-changing accident or diagnosis, you could be entitled to government support.

While you’re at it, you may find potential savings in changing to a new policy. For example, you might be paying for health insurance that covers pregnancy when your family is complete.

5. Think of other ways to get to work

If you travel to work each day, you could carpool with colleagues that live close by. This short-term solution can reduce how often you use your car (and pay for fuel!), which can help during an emergency. You can also consider taking public transport to make your commute a bit cheaper.

If your workplace allows it, ask if you can work from home full time or adopt a hybrid working model with some days in the office and others at home. By travelling less, you can save money you otherwise would’ve spent on petrol or public transport.

6. Use hard-earned loyalty points and cashback programs

Shopping online for everyday essentials? Then use a cashback program for a cheeky discount or two, plus get some cash back to save for expensive times of the year like Christmas. If you’ve got some loyalty points in the bank, see if you can use them to reduce the total cost of your shop. Every dollar you can save will make a big difference.

What support is available during a financial emergency?

There are different support services you can contact when financial emergencies happen.

• Charities and community organisations: These organisations offer people in need vouchers for daily essentials. Some of these organisations can also help pay part of your bills or even back-to-school costs.
• Centrelink: They can provide a payment if you’re eligible, and can assist you if you’ve experienced a crisis and are in severe financial hardship. You might also be eligible for an advance payment. This is where your future Centrelink payments are made early.
• Support for your mental and emotional health: Talking to someone at a mental health support centre, such as Beyond Blue or Lifeline, can help you manage emotionally and direct you to local support. You can call or chat with a counsellor online.
• Financial counsellor: These counsellors can look at your situation and give their advice on what you should do – whether that’s helping you negotiate the cost of regular payments or referring you to other services you might need.