How to thrive in a cost-of-living crisis: A holistic approach to money and mindset

Many Australians feel stretched as the cost of living rises, while incomes fail to keep pace.

If you’ve ever felt like you’re working harder just to keep up, you’re not alone. Rent, groceries, and utilities remain at record highs, making financial security feel out of reach.

While these pressures are real, overcoming them requires more than just budgeting and cutting costs — it’s about shifting your mindset, taking control of your finances, and redefining what true wealth means.

Recent findings from the Australian Unity Wellbeing Index showed that life satisfaction in Australia has reached its lowest point since the survey began in 2002, with financial stress playing a significant role.

A holistic approach to finances allows you to thrive in a cost-of-living crisis by balancing practical financial strategies with the true pillars of wealth – self-worth, purpose, wellbeing, and the time to nurture them.

Reframe your money mindset

Your relationship with money is shaped by beliefs formed in childhood.

If you grew up hearing phrases like “money doesn’t grow on trees” or “money is the root of all evil”, these subconscious messages may still influence your financial choices today. Many people either fear money — hoarding, oversaving, or feeling guilty about financial success — or they avoid financial responsibility altogether.

To shift your mindset, start by identifying limiting beliefs. What messages about money did you absorb growing up? Do you associate financial success with stress, guilt or struggle? Recognising these patterns is the first step toward transforming your financial approach.

By reframing money as a tool for stability and freedom rather than a source of stress, you can begin managing your finances with greater confidence and intention.

Empower yourself through budgeting

Budgeting isn’t about deprivation — it’s about clarity and control. A well-structured financial plan allows you to make intentional decisions rather than reacting to financial stress.

With the recent drop in interest rates, now is a great time to reassess your financial plan. The Reserve Bank of Australia’s 25-basis-point cash rate cut means many mortgage holders will see lower repayments. The Australian reported that a $600,000 mortgage could see monthly savings of about $97. However, without a structured plan, these extra savings can quickly disappear into everyday expenses.

To stay ahead during a cost-of-living crisis, create a budget that reflects your true priorities. Cover essential costs like housing, groceries, and utilities before allocating funds to discretionary spending.

Automating savings can reduce mental load, while reviewing expenses — such as unused subscriptions, frequent takeaways, or reassessing car loans and housing costs — can help free up financial space.

Budgeting isn’t restriction, it’s financial self-care. Knowledge is power.

Break negative spending habits

Many financial struggles stem from unconscious spending, such as purchases made out of habit, stress, or social pressure rather than necessity. If you often feel like your money is disappearing, reassessing your spending patterns can help.

Ask yourself: Are my purchases intentional or impulsive?

Mindful spending can help break the cycle. Try waiting 24 hours before making non-essential purchases or using cash instead of cards to increase awareness. Rather than using shopping as a reward or stress relief, shift to self-care activities that don’t involve spending like enjoying nature, connecting with a friend, or practising mindfulness.

Prioritise true wealth

It’s easy to fixate on numbers — cutting costs, chasing discounts, and tightening budgets. But true wealth isn’t just about money; it’s about creating a life rich in self-worth, purpose, wellbeing, and time freedom.

Rather than focusing solely on financial constraints, prioritising these deeper aspects of wealth — especially in times of uncertainty — can help you feel more grounded and less materially driven.

Ask yourself: Am I prioritising meaningful connections and experiences over material possessions? How can I cultivate wealth in my life beyond money?

Recognising non-monetary wealth, such as self-care, supportive relationships, personal growth, and time autonomy, shifts your focus from scarcity to abundance.

Final thoughts

Thriving in a cost-of-living crisis isn’t just about making ends meet, it’s about shifting your money mindset, aligning your spending with your values, and making intentional choices that create long-term stability and wellbeing.

While economic conditions may be beyond your control, your mindset, habits, and financial choices are not. Your mindset, habits, and choices shape your future — so take charge and thrive, no matter the economy.