The idea of starting over can be an extremely stressful and turbulent time in your life.

It doesn’t matter your age or where you are in life, there are many reasons we may find ourselves in a position of having to start fresh and build ourselves back from financial hardship, including relationship breakdowns, health issues, changes or loss of employment, and being out of the workforce for an extended period of time.

This was something my own mum went through in the early years of my life. After a toxic marriage breakdown, my mum and I essentially started life over again with next to nothing.

It’s one of the many reasons I am so passionate today to provide resources and support to those facing times of hardship and faced with the prospect of ‘starting over.

I wanted to create a resource and provide some tips and share personal experiences that might help anyone going through such a time.

Here are my top 5 tips for starting over financially…

Know you are not alone

You are not the first person to go through financially turbulent times and won’t be the last. It’s in tough times that I believe we really can find strength from one another’s compassion and support.

Find support in groups online, talk with friends and family, and don’t be afraid to ask for help!!

Know your options, and what is available to you. There are often services, advice and hardship plans available to help manage repayments or upcoming expenses.

Having conversations about money is no longer a taboo, in fact, we have so much more to gain from having these conversations. Leave the fear or judgement behind and get comfortable with having meaningful conversations about money with people you trust.

If you are having difficulty paying your bills and debt/loan repayments when they are due, you are likely experiencing financial hardship.

There are several steps you can take after experiencing financial hardship.

Some of your options include 

1. Speaking with your bank and/or lender. Making creditors aware of your situation, especially early on can ensure a small problem doesn’t become a bigger one. Many providers have hardship programs that you may be able to access.
2. Exploring repayment plans. If you are having trouble meeting large monthly payments, it might be more helpful to look at a weekly or fortnightly plan instead.
3. Negotiating new terms. If you are struggling to make repayments, different terms may be beneficial. This could include flexible payment arrangements or be allowed more time to pay – financial experts can walk you through the pros and cons so you be more informed about what you’re committing to

If you are in urgent need of assistance you can also see your options through Services Victoria or Money Smart.

Knowledge is Power

The more you know, the better equipped you are to tackle what’s ahead!!

Knowledge is absolutely your power, so you need to immerse yourself in this information and utilise it to the best of your ability.

It can be challenging to address things head-on and ask for help, but trust that in seeking help and sorting out your situation, you are doing the right thing and will be better for it.

As you begin to start all over, you’re probably going to need access to finance and credit products. Your credit score plays an important role in making sure you can access the credit products you need.

If you are struggling to obtain or have been declined credit, it’s important to figure out why. Getting a copy of your credit report is a good first step in understanding your credit standing.

It’s important to know and understand why you may have been declined for credit. When you apply for credit either with a phone or utility company or a loan with a bank or finance company they generally assess the information on your application as well as information on your credit report against their own lending policies to make a decision on whether they will give you credit.

As part of completing your application, you will have given a lender, phone or utility company permission to view your credit report held by a credit reporting body such as Equifax.

If you have been declined credit you are entitled to a free credit report if you apply within 90 days of being declined and provide evidence that a credit provider has declined your application.

Being aware of your situation, and taking corrective action is a crucial part of starting over.

Take control of your credit score

A huge part of that knowledge is taking control of and understanding your credit score.

Often, we have made decisions in our life or, unbeknownst to us, things have made an impact on our credit score that can have a negative impact on future plans.

There are many factors that can influence your score, both positively and negatively. And it’s important to understand what can drive this up or down!

Your credit score can fluctuate as information on your credit report changes. So if your credit behaviour improves then your score can change to reflect this. Your credit score is affected by factors such as:

• Your repayment history
• Applications you’ve made for credit
• Unpaid debts or defaults
• Adverse information like court writs and judgements
• Credit limits
• Personal information
• How long you’ve been credit active

Equifax has some simple steps to help you keep your credit report healthy and to help improve your Equifax Score:

• Pay your loans and bills on time – Consider setting up direct debits and schedule loan repayments for your payday. We know this can be tricky when experiencing financial hardship, but if you navigate through your loans and bills in the right way, your credit score won’t have to be impacted.
• Keep track of your credit commitments – Do your homework before applying for credit. Making a number of applications within a short space of time will be recorded on your file and is not always looked upon positively by lenders, as it may be an indicator that you’re in credit stress.
• If you move house, notify lenders – advise lenders, phone and utility providers of your new address so they can re-direct bills to your new address. If you don’t pay these bills, a credit infringement or overdue debt could be listed on your credit report.
• If you are having trouble meeting repayments – talk to your credit provider who may assist. 
• Keep track of your credit record – proactively manage your personal credit report by regularly checking your credit report and Equifax Score. You can even monitor changes through credit alerts.

Make your mental health a priority

I believe a lot of our spending habits are tied so closely to our emotions.

Understanding this can help you take control of your financial situation and help you get on track!

Do some research into how and why this could be impacting you, and implement some strategies to cope when faced with emotional situations, especially around money. 

If you feel you are making “emotional spend” purchases, try to stop and work out what motivated you to make that decision. Was it Jealousy? Sadness? Boredom? 

Then, once you’ve identified your triggers, try and find alternatives. This might be finding a sport you enjoy or are passionate about to occupy your time. Or simply going for a walk to take some time to reflect.

Or, if you do want to make ‘emotional purchases set yourself up a specific budget/account so you can put a specified amount within your means that is allocated to that. So you can track and budget for this.

This will help you build healthy credit behaviours, hopefully instilling useful habits that protect against any future financial hardships.

The right balance between paying down debt and saving is different for everyone. Take the time to get clear on your debt repayment vs. savings strategy. You’ll likely get financial and peace of mind benefits, and be more likely to follow through and ditch your debt for good!

Once you start ticking off tasks, you’ll begin to feel a sense of accomplishment, which will be a big part of helping your mental health!

Get organised

Going through a major life change can make you feel REALLY overwhelmed. As my father-in-law would say, it’s like eating an elephant – you need to start just one bite at a time!

Start by getting yourself organised, find all your relevant paperwork, whether it’s from a divorce or debt, even bankruptcy, all of it!

Begin making lists and prioritising tasks. To avoid getting physically and emotionally drained by the process, schedule short amounts of time to focus on certain things.

And while you are writing down your lists and making plans, make sure you have some goals and positive outcomes you are working toward.

Even visual mood boards keep you motivated and excited for the end goal!!

Regularly monitoring your credit report through an Equifax membership can ensure you are updated with the latest information about your credit. It can be challenging to improve when you don’t know where you stand.

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I know right now it might all seem really daunting, confusing and scary! But just know, there have been many others the same age as you in your exact situation that has not only survived but thrived.

We did – And you will too!!

Get your plan set and stay focused on achieving your goals. Don’t stop learning and be open to any and all help and assistance you can find!!

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 circumstance before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser.

For more support on starting over financially head to Equifax’s website here

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