Are you a dollar stretcher?

A ‘money mindset’ is a way of thinking about personal finance. Your money mindset can change over time, and it may help explain your spending and savings habits. Understanding this can help you build habits and strategies to better manage your money.

Dollar-stretchers often find that:

• They experience difficulty paying for essential expenses, like bills and food.
• It’s hard to save money because there’s rarely enough left after paying for essentials.
• They use any unexpected financial windfalls to pay outstanding bills.
• If they receive an unexpected bill, they may have to borrow money or use credit to cover it.
• They often feel anxious about money.

Read about other money mindsets.

Dollar stretchers aren’t bad with money. They’re often excellent budgeters who know how to stretch their income to cover their everyday expenses (like food and transport) and debt repayments. The problem is that their income isn’t high enough for them to save money after they’ve covered everyday costs. Because of this, dollar stretchers are at high risk of financial hardship.

Dollar stretchers aren’t always on a low income. Someone with a high income who struggles with significant debt could also fall into this category. Dollar stretchers often have minimal savings, and may use credit options like payday lenders. They spend very little on leisure activities.

Dollar stretchers experience high levels of financial anxiety and often struggle to find ways to improve their financial situation.

If you’re struggling to pay your debts you may be in financial difficulty. The best thing you can do is reach out to us as soon as you can. Visit our financial hardship hub to find out what assistance is available. We may be able to help you by deferring or reducing payments, or restructuring your loans so you can make repayments at a lower interest rate.

You can also read our advice for dealing with financial hardship, and access additional support services if you need them.

Remember that loans don’t always have to come from banks. You may be eligible for funds through Centrelink, opens in new window, or through Good Shepherd microfinance, opens in new window.

Debt repayments make it difficult to save money and get ahead. If you’re a dollar stretcher, you may take on high interest debt to cover everyday expenses. These repayments then make it harder to save money.

If you’re making repayments on multiple loans, consider consolidating your loans so you can make repayments at a lower interest rate. Explore our personal loans for debt consolidation.

You could also investigate balance transfers, which could help you manage credit card debt.

Once your debt repayments are under control, it’s time to start saving an emergency fund. You can dip into this when faced with an unexpected expense, to avoid taking on more debt. Aim for $500 first, and then build to $1,000.

Look for ways to earn extra money, by taking on extra shifts at work, selling items you don’t need anymore, or working at a side hustle. You can also look into small ways to save, like avoiding credit card interest.

Setting up a savings goal and tracking it in the NAB app is a great way to keep yourself motivated. It’s also a good idea to set aside time each month to talk about your financial situation. Use our handy guide to help you start a conversation about money.