In today’s day and age, we need money to survive. Everyone’s relationship with money is different, which is why some of us may describe ourselves as “savers” or “spenders”. Regardless of your spending style, it’s fair to say that at the end of the day, most of us base our spending on our earnings. So what do you do when your source of earnings shrinks or even disappears?
COVID-19 has made a big financial impact on many individuals and businesses both internationally and locally. Shops have had to close and employee hours were reduced. Seemingly overnight, millions of Australians were left unemployed or underemployed, with almost half occurring over the course of the pandemic.
With a reduced income and household expenses still looming overhead, it’s important to keep your cool. Here’s some budget advice on how you can manage what you have:
1 – Review Your Spending Habits
The very first step to pulling through this period with your finances intact is going into it with a plan. Revisit your last month’s spendings to see where your money went. Don’t only consider cash, either; take into account any transactions made on credit. This will help you know where your money has been going. Knowing that information will help you establish how much you’ve been spending on luxuries and necessities.
2 – Revisit Your Expenses
After taking a look at where your money has been going, look at which costs you can reduce. Depending on the money you have available, consider significantly cutting down on luxury expenses. However, you may also be able to reduce or defer other expenses, such as your mortgage or rent, superannuation, and health insurance. Get in touch with the relevant people to discuss alternatives or even see if you can pause contributions temporarily until your financial situation improves.
Even daily expenses such as utilities, phone coverage, internet, and more can be reduced. Look for better deals that you might be able to take advantage of. Consider cancelling unnecessary subscriptions and searching for ways to spend less on the essentials.
3 – Avoid Late Payment Penalties
One of the biggest underlying dangers of temporary financial squeezes is the payment penalties that can add up. Any bills that have penalties or interest fees must be paid on time so as to not put additional stress on your financial situation in the future. Create a schedule to help you meet payment deadlines and see if you can set up automatic reminders to ensure you don’t miss a single one.
4 – Explore Assistance Programs
The Australian Government is offering many stimulus packages for individuals and governments alike. Check official government avenues such as Moneysmart regularly to see if there are any you are eligible for. If you are entitled to any help, make a claim as it can help keep you afloat.
Conclusion
Unprecedented times have been rough on individuals and business across the world. However, remember that this is temporary and things will improve over time. In the meanwhile, however, make sure you do all you can to spend your money wisely. You’ll thank yourself later on!
Are you looking for help with money in these difficult times? If so, please get in contact with New Wave Advice. Our financial planners in the Gold Coast can sit down with you in person or via any video link platform to review your situation and help you develop a realistic and achievable plan.
