Cost of living: How to navigate financial anxiety in 2026

Systemic financial pressure is bearing down on Australians in 2026.

Record fuel prices, disrupted food supply chains and global trade uncertainty have made even short-term financial planning feel hard for many Australians.

These forces are largely outside any one person's control but their impact on our mental health is real.

But there are things within reach that can help.

More Australians are stressed about money in 2026

A key point is that it’s not just you.

Research by the Salvation Army found that more than 9.7 million Australians (44%) started 2026 in debt, 45% feel pressure to spend more than they can afford and almost nine in ten (89%) feel the same or more stressed about their finances than last year.

According to an April 2025 survey from Compare the Market, almost half of Australians said cost-of-living pressures had worsened or triggered anxiety and depression, impacting their health, sleep and relationships.

Silvia Pothoven, Head of Corporate Benefits at Gallagher** - a Bank Australia provider that offers the MoneyFit financial wellbeing program to Bank Australia employees - says it's a conversation she's having constantly.

"People are bracing for interest rate increases, seeking out government incentives for bill relief, discussing the impact of the fuel price, and even moving house or back in with family to reduce rent or mortgage stress," she says.

If all this sounds familiar, it's important to know that what you're experiencing is a rational response to a difficult economic environment: iIt feels hard because it is hard.

For years, the conversation around financial stress focused on individual spending habits - the daily coffee, the cafe lunch, and so on.

However, in 2026, that framing feels increasingly out of date as the forces shaping household budgets are global, structural and largely beyond any one person's control.

Why financial stress hits differently

Unlike stress at work, you can’t ‘clock off’ from your financial anxiety, Silvia explains.

“Finances follow you wherever you go,

“And it’s not always about a lack of funds. It can also be about a lack of clarity.”

That fog of uncertainty is part of what makes financial stress so draining.

And if we slip into avoidance mode, which is a very human response, things can snowball.

“Bills pile up, and credit cards and utility bills can accrue interest if they are not paid on time,” Silvia says.

There can also be a cycle at play: financial stress affects our mental wellbeing, while diminished mental wellbeing can make it harder to make clear, confident decisions around money.

Poor sleep (one of the most common symptoms of financial stress) can compounds this further, making it harder to think clearly about the very decisions that could help.

Silvia’s advice: “Be gentle with yourself if you’re in that loop”

How to regain a sense of control

Write down the things you have some control over, however small, then pick one (or more if you like) and act on it.

Bringing lunch to work, cancelling a subscription you'd forgotten about, getting to payday with money still in the account because of a few small actions: these wins add up.

That feeling of having acted, and it working, can help to begin rebuilding a sense of control.

It also helps to be realistic about what you can't change.

"We often can't control rising costs," Silvia explains.

"The first step is understanding and accepting that with some self-compassion."

Navigating EOFY sales without the financial hangover

End of Financial Year (EOFY) sales can be engineered to trigger retail "FOMO" (fear of missing out).

But is a discount truly a saving if you weren’t planning that expense in the first place?

To help protect your cash flow during mid-year retail peaks, consider whether these four quick strategies could be useful:

• Distinguish "saving" from "spending": A 40% discount on a $500 appliance is still a $300 cash outflow. If it wasn't in your monthly budget, it's likely a cash drain, not a win.
• Use the 48-hour rule: Write the item down (or put it in your cart) and step away for two days. If the urge passes, it could easily have been an impulse triggered by clever marketing.
• Beware the Buy Now Pay Later trap: Retailers often heavily push Buy Now, Pay Later options during sales seasons because they reduce the immediate friction of spending.
  Consumer advocates at CHOICE warn that this tactic pushes people to spend more than they intend: “some studies have found that 38% of users spent more than they planned because BNPL was available”.  This can lead to a pile-up of split repayments that can overwhelm coming months' cash flow.
• Check the "was/is" price history: Don’t take a sale banner at face value. Both the ACCC guidelines on misleading prices and consumer groups warn that retailers can distort savings by temporarily inflating the 'was' price right before a major promotional event.
  Before completing a purchase, look up the item online or use an independent price tracker recommended by CHOICE to verify its true retail history across different stores.

6 practical ways to manage cost-of-living pressures and cut household expenses in 2026

Silvia says there are things people commonly overlook when trying to regain a sense of financial confidence:

1. Government rebates and concessions

These are worth checking, and many people don't know what they're entitled to. Federal and state governments have introduced a range of cost-of-living measures in 2026.

Demand has been high: when Victoria's 20% rego rebate opened in early June, the Service Victoria website crashed within hours under the volume of applications. Moneysmart's benefits finder is a good starting point.

2. Buy Now, Pay Later beware

These commitments can stack up without feeling like debt.

The Salvation Army's 2026 research found that more than one in four Australians carrying debt started the year with BNPL obligations.

If you're running multiple plans simultaneously, ensure you're mapping your total debts across all platforms to get a realistic picture.‍

3. Utilities, insurance and your phone plan

Silvia suggests reviewing these regularly as companies aren't renowned for being loyal to the customers who have been with them the longest, despite what we'd like to believe.

A phone call asking for a better rate, or letting them know you're experiencing financial difficulty, could open up options that aren't advertised.  It costs nothing to ask.

“Make sure you’re getting the best deal possible,” Silvia says.

“And if you’ve paid off a device, delaying the upgrade can be better for the environment and your back pocket.”

4. Grocery shopping can be more flexible than it feels

“Choosing cheaper cuts of meat or swapping to generic brands can add up without significantly changing the quality of your meals,” Silvia says.

If there's a greengrocer near your regular supermarket it could be worth comparing prices. You might find some bargains.

5. Reconsider everyday transport habits

“Personally, I’ve started riding my bike instead of driving for short local trips,” Silvia says.

“I now fill up with petrol every three weeks instead of every ten days, and I’m genuinely enjoying it!”

6. Discretionary spending doesn't have to stay at the same rate

Takeaway, eating out, and kids’ extracurricular activities – these are also worth reviewing.

“None of these changes need to be permanent,” Silvia says. “But they can help restore a sense of control.”

When to ask for help

Counter to popular belief, seeking support early is often when it’s most useful, Silvia explains.

Don't be afraid to reach out to a trusted platform if you need to.

“Professional financial guidance isn’t just for those who’ve hit rock bottom.

“Seeking guidance is best when you are in control, but it’s needed when you’re out of control,” Silvia says .

The National Debt Helpline is a free, independent and confidential not-for-profit service that helps people manage debt and regain control of their finances.

“When you have a handle on your situation, you have options. When things have deteriorated, some of those choices disappear.”

If the 3am spiral has become a regular occurrence, Silvia’s suggestion is simple: write it all down.

“Once it is all in one place, it’s easier to manage, understand, digest, and plan for,” she says.

Financial stress is real, widespread and deserves to be taken seriously – but it doesn’t need to be faced alone.

Where to go for help

• ‍Moneysmart - Budget planners, calculators and practical money guides. moneysmart.gov.au
• Bank Australia (for Bank Australia customers) - Hardship support for customers experiencing financial difficulty. bankaust.com.au/hardship
• ‍BeyondBlue - Money and mental health quiz and toolkit. beyondblue.org.au
• ‍National Debt Hotline - Free, confidential financial counselling. ndh.org.au
• ‍MoneyCare - The Salvation Army’s free and confidential financial counselling service. Salvationarmy/moneycare.org

*Financial advice disclaimer: This blog is intended as general information and not as financial advice. Please seek personalised advice from a registered financial planner to suit your own individual circumstances.  

** Gallagher provides financial wellbeing support and services to Bank Australia employees.