How the law of large numbers is failing our families

Wilson Luna

Do you ever get the feeling that your family’s problems are getting lost in the ‘big’ numbers that tend to be the focus of financial advice and relief efforts? Well, not anymore – struggling Aussies need help now, and that makes it time to talk about what you can do to ease the pressure on your family.

‘One is the loneliest number that you’ll ever do …’ the old song goes, and that’s never truer than when you’re facing financial hardship. But we live in a world that tends to focus on the ‘law of large numbers’ – if the problems are large enough they get our attention, our interest and our action. And when the numbers aren’t there, the problem gets quietly overlooked – but that doesn’t mean that the problem just vanishes. If your family is struggling financially, it’s important to you – and it doesn’t help at all that the ‘big numbers’ keep telling you that most Aussies are doing just fine.

If your family falls into those ‘small’ statistics that so often get overlooked by groups offering financial advice, this one’s for you.

Take a look at these ‘small’ statistics that aren’t making headlines:

•    17 per cent of Australians surveyed are finding it difficult to repay debt.
•    2 per cent don’t know how they’re going to make their next debt payment.
•    14 per cent have missed a minimum bill payment in the last three months.
•    Around 4 per cent have had to cut back on basic necessities such as groceries.

From a ‘number’ perspective, these statistics don’t sound particularly worrying. But if you look at them from a ‘people’ perspective, the picture changes dramatically – they tell you that 3,843,431 people are struggling to repay their debts and 452,168 of them have no idea how they’re going to make that next payment; that 3,165,179 Australians have missed a minimum debt payment in the last three months and 912,000 people in our communities have had to cut back on buying basic necessities, such as groceries, to meet their debt commitments. And the fact that people can find themselves in this kind of financial crisis is symptomatic of a system that focuses on big numbers – profit – and not people.

But while ‘one’ can be a lonely number when it means no one notices to the crisis your family is facing, it’s also the most important number there is. At Your Family Your Money, we understand that your family is always going to be ‘number one’ to you – and that means that you need solutions to your financial problems now, not when the numbers get big enough to attract media attention.

If you’re one of the millions of Australians that make up the ‘small’ statistics above, these tips could be just what you need!

Make contact
If you’ve got problems with credit, debt solutions should be one of your priorities. Facing debts you’re struggling to pay off can be a scary thing – even going to the letterbox or answering the phone can be an ordeal, because you never know when you might receive another bill or another demand from your creditors. And that’s why you need to go to them. Contacting your creditors and explaining your situation opens the door to negotiating a payment plan you can handle – so your creditors get their money, and you don’t have to be afraid anymore. While not all creditors may be willing to compromise, many just want to know that you’re committed to giving them their money back, so it’s always worth a shot.

Plan ahead
Knowing where you are, what you have and what you need to do to get where you want to be is a vital part of improving your financial position. Create a statement of net worth to determine where you are today, a budget to help you track and control your weekly spending and a payment plan that allows you to concentrate on paying off the debts with the highest interest rates first. We’ve got the budget spreadsheet templates and money worksheets you need to get started right here, and you can always head to the forum to chat with other families in the same boat to get some great ideas and support.

Ask the experts
You’re probably thinking that ‘financial advice’ is something that only wealthy people can get – but that couldn’t be further from the truth! Everyone needs great financial advice, and the best news is that there are a variety of organisations out there that offer free financial counselling that can help you deal with the issues you’re facing – and talk you through all the options available to you.

‘Little’ numbers can sometimes hide big problems – but while being just ‘one’ struggling family can feel lonely, there are always things you can do to improve your situation and people who can help you. Just remember that the most important thing you can do is take control and take action – because every step you take is one step closer to overcoming whatever challenges you’re facing right now.

Author's Biography

Wilson Luna is an author, wealth adviser and founder of Your Family Your Money. Your Family Your Money’s goal is to simplify traditionally complex financial strategies, demystify financial jargon and debunk common financial myths, becoming every family’s first stop for financial advice, information and inspiration.