The hidden dangers of avoiding the cost-of-living crisis

Seemingly overnight prices have soared across the board on a range of consumable goods including essentials such as housing, food, fuel and utilities. No one is immune to our current cost-of-living crisis, however some of us are retreating from the reality of it.

Whether it’s ignoring the strain on household budgets or pretending that things will ‘sort themselves out,’ avoiding its existence isn’t a solution – it’s a recipe for financial downfall.

Today’s cost-of-living crisis isn’t just about inflation rates or sky-high housing prices. It’s about the gap between stagnant wages and increasing expenses, combined with the psychological toll of financial uncertainty. People might fall into the trap of ‘wishing it away’, hoping they will somehow make it through or worse, believing their current situation is just temporary.

Unfortunately, high prices aren’t going away anytime soon and avoiding or ignoring these financial pressures can have devastating effects. In my work as a financial coach, I see clients who are racking up debt trying to maintain their lifestyle. On the flipside some clients have become overly frugal to the point of reducing their quality of life without realising the toll it’s taking on their wellbeing.

Financial coaching helps individuals confront this reality head-on and develop realistic strategies to not just survive but thrive in uncertain economic conditions.

Instead of burying your head in the sand, a coach will guide you in creating a financial plan that acknowledges the challenges of today while positioning you for future success. This involves cutting through denial, understanding the deeper financial dynamics at play, and taking practical steps to manage, adjust and even thrive.

Going through these recent rapid economic changes has made us all assess – can we absorb a financial shock? Are we financially resilient?

And while we’re all at the mercy of economic uncertainty, financial coaching works to anchor our financial stability through empowering us with the knowledge and mindset to face these challenges.

By addressing your beliefs, actions, and decisions, financial coaching can help you turn your relationship with money from one of stress and scarcity into one of confidence and growth.

Dee O’Callaghan is a qualified Financial Coach and Team Lead at the Financial Wellbeing Collective. With over 25 years of experience in the financial services sector, including managerial roles, she has spent the last 6 years dedicated to the not-for-profit sector, helping individuals improve their financial wellbeing.