If you happen to be stressed about your money right now, it is unlikely you are alone.

Everything is going up in terms of cost. Buying or building a house now costs eleventy million dollars. So does buying a car assuming you can find one. And because of FOMO everyone thought paying (and borrowing) eleventy million dollars was a jolly good idea.

And that’s before we get to the weekly shop or utilities.

I was once told that money stress can wipe 2 – 5 points off your IQ. No idea if that is true but it does make sense.

During Covid, we were all told to be mindful of our mental health. Now that we can catch planes it seems mental health is no longer an issue. But it is.

Did you know that Australia is the second largest user of antidepressants in the world? When you consider our population size (we are ranked 55 in world population) that is astonishing.

It is not widely known but our biggest source of stress at the moment is the rising costs of practically everything, but it seems rising interest rates is a particular worry.

I have a medical practice owner who likes to build an empire. They have a few practices and from the outside his life is one to be desired. A few weeks ago, I told him that his interest bill is likely to increase by about $100,000. I would like to say that he was a bit shocked but that would be a gross understatement. I think he turned green. And so, we had to come up with a plan.

If you are also getting stressed and may think you will turn green, or purple or even orange at the thought of higher interest rates here is what you may want to consider:

• Plan ahead

There is a generation of people who have only lived in a low interest rate environment. The thought that you must pay more for your mortgage is alien but it would be a good idea to know exactly what it means.

Go to MoneySmart’s ‘Mortgage Calculator’ and see what your repayments would be if interest rates went up another 2% because that is likely where interest rates are going.

You then note what your new mortgage payment amount will be. And effective today pretend you must pay this now and work out how you are going to pay it.

• Try to get a loan rate reduction.

Does not always work but worth a try.

If you have more than 20% equity in your home, you should call up your bank and ask them to reduce the rate especially if you have been with them for several years.

You will get 2 responses. They may give you a bit of a discount or they will tell you to get lost. But unless you ask, you will not know. 

• Spending!

Look at your spending.

I am not talking about how much you spend on your avocado sandwich or breakfast although if you are buying one everyday it may be a bit of an issue. I don’t want to be the accountant that says you need to be boring and tight with your money. Your have earnt it and should enjoy it just not all of it.

And don’t think a budget will help even though everyone on earth will tell you to do one. Why? Well because they rarely work, and few people will stick to it. I would rather you put away say 10% of your income and decide that you have 90% to pay for your essentials and fun. Then stick to it!