COVID-19: A Guide To Living On A Reduced Income
It’s a fact that the COVID-19 pandemic gave rise to the financial pressures that many individuals are facing today. The economic impact on the private and public sectors are now a possibility and no longer a probability.
Dealing with this new reality is one thing but dealing with the feeling of being overwhelmed, stressed and having to adjust is another.
If you’re finding that you can’t afford the basics like food and housing, urgent help is available to you.
There are practical steps you can take to make well-informed decisions today that will help ease the burden of tomorrow.
1. Lost Income Government Assistance
If you have been stood down or had your working hours reduced, you may be eligible for lost income assistance.
Centrelink Payments
There are extra income and household support payments available for people affected by COVID-19:
Such payments are:
· A temporary fortnightly $550 coronavirus supplement from 27 April 2020.
· Expanded eligibility for some payments to make them easier to claim.
· A crisis payment if you need to self-isolate, are in severe financial hardship and you can get an income support payment.
· Two (2) automatic $750 Economic Support Payments.
Visit Services Australia for more information on financial support.
JobKeeper Payment
The Government is providing fortnightly payments of $1,500 (before tax) to employers to help keep their employees working.
If you’re self-employed, you can also apply for the JobKeeper Payment.
Visit The Treasury, to learn more about this payment.
2. Request Mortgage or Rent Relief
If you’re having trouble paying your mortgage or rent, there are steps you can take to make it easier for you.
Apply for Financial Hardship
If you’re struggling to pay off your mortgage, reach out and have a chat to your lender. Some banks are offering 6-month repayment deferrals on mortgages.
The Australian Banking Association has a list of bank hardship teams available to assist.
Ask for Rent Relief
If you’re struggling to pay your rent, reach out and have a chat to your landlord or real estate agent.
Ask about reducing or deferring payments for a specified period i.e. 30-days.
Put your request in writing as evidence that you've tried to resolve the situation.
3. Reduce Your Spending
Evaluate your current expenses to look for ways to reduce your spending.
The trick to saving money is to implement the little changes to your routine. Because small changes make a big difference.
A Quick Tip:
Have a look through your bank or credit card statements for the last two months. Identify anything that isn't essential. This could be things like subscriptions.
Reduce Your Grocery Bill
Below are some quick tips to help reduce your grocery bill.
· Always plan your meals and only shop for the ingredients you need – not want.
· Choose home brands over big brands.
· Buy fruit and vegetables that are in season or on sale.
· Cook meals that contain lots of leftovers you can freeze for later.
· Plan some meals that don't include meat as meat can be expensive.
Reduce Your Electricity Bill
Now that most of our time is spent at home, most likely your electricity bill will increase.
To help reduce your electricity bill, compare energy suppliers to make sure you're getting the best deal. Use this - Government's Energy Made Easy.
For more quick tips on reducing your electricity bill, read 7 Money-Saving Hacks On Everyday Expenses [insert the link].
4. Request Financial Hardship for Bills
If you’re struggling to pay for essential services such as electricity, phone, water or gas, contact your provider. Explain your situation by telling them that you would like to apply for financial hardship.
There may be options available to pay your bills in instalments or get an extension.
You may also be eligible for a utility rebate or voucher.
Bill smoothing
This is a type of method used to manage future bills by spreading the cost of your bill over regular weekly, fortnightly or monthly payments.
For example, you may choose to pay $50 a fortnight towards your water bill.
There are now options for you to renew your car registration for 1 month to help manage your costs. This complements the existing 3, 6 and 12-month registration.
For more information, head over to the Queensland Department of Transport one-month registration.
Credit card and loan repayments
If you have difficulty paying a personal loan or credit card payments, contact your bank’s hardship team to arrange a hardship variation.
A hardship variation may mean reduced interest or repayments for a set period.
Ask for payment deferrals or plans
You’ll be surprised at how many companies and organisations are willing to help at a time of uncertainty.
For example, some local councils have waivered parking, food licence and other council fees.
Some insurance companies are offering premium waivers or suspending memberships.
The National Debt Helpline explains how to negotiate payment terms.
5. Accessing your super
If you’re affected by the COVID-19 pandemic, you may be eligible to access up to $10,000 of your super before July 2020. With a further $10,000 in the 2020-2021 financial year.
Just remember, your super is your retirement savings. So, check if you’re eligible but make sure you take the time to consider all your options before applying.
Plan ahead
A budget planner is the best tool to help you manage and monitor your expenses.
Plan for the next 3 months using this online excel budget planner.
In Conclusion:
You can reduce the financial pressures of living on a reduced income by seeking government assistance or by using methods like bill smoothing.
Reach out to your provider if you’re struggling to pay for essentials (water, electricity, etc). And, submit your situation in writing as proof that you have taken the first step in resolving the matter with your provider.
Have you or someone you know has been affected by the COVID-19 pandemic? What assistance did you seek/receive?
Let me know your thoughts by writing your comments below.
Have you got a financial goal that you would like to achieve? Phone me, Benjamin Collins on (07) 3041 1382. Alternatively, send me a message on LinkedIn.