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I am an optimist at heart. I’m a “glass half full, and top me up please,” kind of woman.
But it’s hard to ignore the impact of Coronavirus – the long queues outside Centrelink, the businesses that have suddenly closed their doors either through mandatory shutdown or voluntary ceasement of trading, along with the stories starting to circulate in our communities about job losses and financial hardship as the Federal and State Governments urge us all to #stay@home.
And even though I do like to look on the bright side, I also always advise people to be prepared for the worst, so right now, the impending recession is something we definitely need to talk about.
As the economy slows down, we will all feel it to some degree. And there will be more to come over the coming months. Some economists are saying that with all of the work the Government has done to keep the economy afloat, the recession will be short, and shallow. But it’s not always that predictable. And, the commentators are also saying that COVID-19 will change life as we know it anyway, so it’s really difficult at this time to know what’s on the other side.
Let’s consider the worst case scenario. No income. If you lose your job, or have your work hours reduced and your income is much less than you’re used to, what do you do?
Here are some survival strategies.
Take out your budget and figure out if there’s anywhere you can cut back. With many retailers and other entertainment options now closed, as well as options for socialising severely limited, there’s money you won’t need, right there. What other expenditure can you cut?
PS. you don’t need new shoes to cheer you up. And if you’re planning some DIY while you’ve got the time, then look for your tools and supplies on ebay or the local buy/swap. You might snaffle a bargain and every dollar you can save right now will help.
There is no shame in applying for the jobseeker or the jobkeeper payment if you need to. It’s a basic allowance that will at least keep some money coming while you need it. Find out if you can get rental assistance or additional support if you’re a single parent. The welfare system in Australia is pretty complex, so you will need to spend time on the Centrelink website, or on the phone speaking to Centrelink staff. But make sure you act now, the registration deadline for some of these payments is April 14.
Remember all the times I’ve said (or written about) the fact that you need a savings buffer? Well, now is the time to use it. The economists are predicting that life could be the way it is for at least six months, so use that as your guide.
There are still a few places hiring right now. Don’t lose hope. Keep looking, consider positions outside your current career… or take an online course and learn something new. Definitely keep your eye on this new government job hub. Click here. It has vacancies right across Australia.
Keep the bills paid. This is really important. Forgo the takeaway and the bottle of wine and put this money towards the things you really need: the roof over your head, and food in your belly. It is much much cheaper to cook at home, and if money is tight, it’s a no-brainer.
Don’t let the debts get on top of you. You should at least be aiming to pay minimum repayments. Remember too, that banks, credit cards, internet suppliers, electricity companies – they all have financial hardship services you can access if you’re in dire straits.
Obviously you can’t have a garage sale right now. But the local buy/swap pages are still trading. Just be sensible about adhering to social distancing recommendations.
The Barefoot Investor, Scott Pape said a few years ago that the average Aussie family has about $3,000 worth of stuff lying around they don’t use and could definitely sell…. Worth thinking about.
We wrote a blog about this recently. The Federal Government has created a temporary regulation that allows you to tap into your superannuation..
Just be aware that while $10,000 (the maximum entitlement this year and next) could be useful, it really should be a last resort, because $10k now is going to be worth a lot more to you when you retire.
If you find yourself in real trouble, then talk to a money coach or financial planner – the consultation fee can be deducted from your superannuation. Just remember, there is always a solution, no matter what your current circumstances, sometimes though, it does help to have a professional to guide the way.
If we can help, talk to us.
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.