It is human nature to live according to your means. Some people are savers, some are spenders, but generally, we all live life based on our income. In the last few weeks, that paradigm has shifted, and the income we may have thought was somewhat reliable is suddenly not, and you may now be faced with managing on a reduced income.
Whether you have lost your job, your business has had to close down, your hours have been reduced or you are a retiree living on the return on your investment, most people have been financially impacted by the fallout from Covid-19. In fact, over 3.9 million Australians are unemployed or underemployed, that’s 1.4 million more than prior to the virus hitting.[i]
So if you find your income reduced, you are not alone. Here are a few tips on how to manage in the short or even medium term on a much tighter budget.
Firstly when managing on a reduced income, you need to have an idea of where your money is going. Traceback a couple of weeks, even a month through your credit and debit accounts and get a feel for what you are spending your money on. Then think about what is a ‘need’ versus a ‘want’. Once you have decided what it is you really ‘need’ to spend your money on, you can draw up a budget, and identify if what comes in will cover what goes out.
Look at costs you can reduce, even if it is only for 3-6 months. Include things like:
Most of us get a little complacent around things like electricity and gas bills, phone coverage, internet providers. car and house insurance. Use the extra time to shop around and see if you can get a better deal. You may be surprised by how much you can save.
Most of us get a little complacent around things like electricity and gas bills, phone coverage, internet providers. car and house insurance. Use the extra time to shop around and see if you can get a better deal. You may be surprised by how much you can save.
Check with Centrelink as to what you are entitled to from the Government. Whether it is JobSeeker, JobKeeper or some form of business support from one of the many stimulus packages the government has announced, if you are entitled to it, you should make a claim.
Now it’s time to revisit that budget, drop in the new numbers if you have been able to reduce any of your outgoings. You may find you have enough to spring for the occasional ‘want’ after all.
Remember things are not going to be this tough forever. We will come out the other side of this and go back to some form of normal. In the meantime, it is a great opportunity to identify what is really important in your life.
If you would like some help or advice from us in these difficult times, please give us a call or contact us via the link below. We can sit down with you in person or via any video link platform, to review your situation and help you make some positive plans.
