Since precautionary measures were heightened to slow the spread of COVID-19, almost 1 million Australians have lost their jobs. According to the Australian Bureau of Statistics, Australia lost 7.5 per cent of its jobs between 14 March and 18 April. If you’re one of the many Australians who has lost their job or now have a decline in their income /hours worked, it’s understandable that you may be feeling stressed about managing your finances.
Put together a new budget
The first thing you need to do if your income has experienced a decline is put together a new budget. With a reduction in your income, you’ll likely be looking to reduce your fixed and discretionary expenses. Put together a budget that includes your essential expenses such as your mortgage or rent payments, bills, and groceries. This is also a good time to assess which expenses you can do without until your income rises again.
Set up payment plans
Losing your source of income can be stressful, especially when you have ongoing payments to meet. If you’ve put together your new budget and you’re not sure you’ll be able to meet your regular payments, speak to your mortgage lender and other providers about setting up a payment plan to minimise the impact of the decline in income. The important thing is that you do this proactively and keep communication open as having these conversations now will put you in a much better place to negotiate.
See what support you may be entitled to
The government has announced a range of support packages available to people who have lost their source of income or have experienced their income decline significantly . Check which support you may be eligible to receive and organise all of the details you need to apply. Full details about the Federal Government’s measures to support individuals and businesses are available on the Treasury website.
If you’ve lost your income due to illness or injury and you have income protection insurance, check what claims you are eligible to make and what payments may be available to you.
Identify potential savings
When you put together your new budget, you probably identified expenses you could do without such as gym memberships and other discretionary expenses. To identify further savings, check if you can switch to cheaper providers for your utilities such as electricity, gas and internet and consider winding back your mortgage payments if you have been paying extra.
Seek advice from financial professionals
In stressful times, it can be hard to look beyond the current period of financial stress. However, this is also an opportune time to reset your financial plan for the future. Take this opportunity to speak with your financial professionals and if you are a client of RP Wealth Management than please reach out. Look to also discuss your options with your mortgage lender or broker, accountant, and a financial adviser to manage your finances now and into the future effectively.
At a stressful time for people, it’s important that you don’t feel like you need to weather financial challenges alone. Taking the time to see what support may be available through the government’s support packages is a good place to start. And to set up a financial plan for the future that also addresses your current financial challenges, make sure you speak to a qualified financial professional for tailored advice.
https://www.abc.net.au/news/2020-05-05/almost-one-million-australians-lose-jobs-due-to-coronavirus/12215494 “Almost a million Australians out of work due to coronavirus; RBA tips economy to take 10pc hit” ABC News (5 May 2020)
https://theconversation.com/90-out-of-work-with-one-weeks-notice-these-8-charts-show-the-unemployment-impacts-of-coronavirus-in-australia-136946 “90% out of work with one week’s notice. These charts show the unemployment impacts of coronavirus in Australia” The Conversation (28 April 2020)
Useful Links to help you:
https://www.ato.gov.au/general/JobKeeper-Payment/ “JobKeeper Payment” Australian Taxation Office (16 April 2020)
https://treasury.gov.au/coronavirus/businesses “Support for Businesses” Treasury (2020)
https://treasury.gov.au/coronavirus/households “Supporting Individuals and Households” Treasury (2020)
https://treasury.gov.au/coronavirus/business-investment “Supporting the Flow of Credit” Treasury (2020)
The information in this website and the links has been prepared for general information purposes only by our research partners and does not take into account your personal objectives, financial situation or needs. It is not intended to provide commercial, financial, investment, accounting, tax, or legal advice. You should, before you make any decision regarding any information, strategies, or products mentioned on this website, consult a professional financial advisor to consider whether it is suitable and appropriate for you and your personal needs and circumstances.