Living on a reduced income

It can be a massive shock to suddenly lose your job or have your income reduced. Right now, that’s the reality for hundreds of thousands of Australians as a result of the Covid-19 pandemic. But, with a little bit of knowledge, you will be able to get through this.

By Julie Nipperess

Woman checking her empty wallet while credit cards are placed on the table

Life as we know it, is changing right before our very eyes. And our wallets, bank balances, savings, investments and superannuation are being affected as this current situation continues.

It’s stressful for many people, but it’s important not to be complacent.

When you’re living on a reduced income you really need to take control of your finances.

Man holding the tablet and a girl sitting on the couch with a dog

Get the help you’re entitled to

The good news is that there is a lot of government assistance right now, including Jobseeker and Jobkeeper payments, as well as rental relief packages for tenants and financial assistance for landlords.

Most local councils are enabling residents to defer payment deadlines, or arrange to pay rates over a long-term period, and banks are being very flexible with mortgage payments.

Similarly, schools and body corporates have payment schemes in place. In fact, most businesses offer some form of financial hardship services so contact your internet, electricity, gas, and phone suppliers to see what options are available to you.

You can also access up to $10k of your superannuation this year and next, but this really should be a last resort.

Lady holding a mug and looking at the window

Reduced income = reduced spending.

The most important aspect of managing on a reduced income is budgeting. If you’re not one to budget, now is a great time to start.

You can download our free budgeting worksheet here.

The simple fact of the matter is that you will need to reduce your spending. But don’t cut corners on the necessities.

Pubs and restaurants are about to re-open and it is tempting to socialise if you haven’t seen your friends and family in awhile, but if you’re on a reduced income, it might be better to have a couple of friends at home for a BYO night, instead.

Buying groceries and cooking in your own kitchen is always a cheaper option. By planning meals in advance, and aiming to cook meals that have similar ingredients, as well as meals that can be made in bulk and frozen for a later date, are sure fire ways to keep the food bill under control.

Sad and Depressed partners looking at the bills

Use this time to review all your bills

If you’re not working, then use this time to look at your spending over the longer term. Review things like your energy supplier and your insurances – shop around. You could save yourself in the long run. Just be aware that there can be ‘hidden costs’ in changing suppliers. For example, most electricity companies will want to do a final meter read and charge you if you’re winding up your account … it might be wise to check in and find out when this is done during the course of the year so you don’t have to pay for a ‘special reading.’

If you’re looking at insurance, make sure you get cover that matches what you need. Just be aware that the ‘devil is in the detail’ so take your time and read the information carefully.

What can you learn from this?

As has been said over and over and over again, ‘these are unprecedented times.’ None of us could have seen Covid-19 coming. It has been a difficult and tragic period for many people, and it’s not over yet.

But as with all types of change, it presents an opportunity for us all to learn something, to do things differently.

So ask yourself, now that you’re being forced to manage on much less money, what does this mean for you in the future – can you reinvent your lifestyle to save more and spend less?

If we can help, contact us. This situation won’t last forever, so stay optimistic and look after your health. And manage your money wisely.


This is general advice and should not be treated as personal advice.
Julie Nipperess is an authorised representative of Step Up Financial Group Pty Ltd ASFL No: 512509.

Need more information? Get in touch with Step Up Financial

    • 107 Moulder Street,
      Orange, NSW 2800

      PO Box 2499
      Orange, NSW 2800

    • (02) 6362 5445