5 Tips to Survive a Decline in Income

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5 Tips to Survive a Decline in Income

Since precautionary measures were heightened to slow the spread of COVID19, almost 1 million Australians have lost their jobs. According to the Australian Bureau of Statistics, Australia lost 7.5% of its jobs between 14 March and 18 April. If you’re one of the many Australians who has lost their job, it’s understandable that you may be feeling stressed about managing your finances.

Put together a new budget

The first thing you need to do if your income has fallen is put together a new budget. With a reduction in your income, you’ll likely be looking to reduce your fixed and discretionary expenses. Put together a budget that includes your essential expenses such as your mortgage or rent
payments, bills, and groceries. This is also a good time to assess which expenses you can do without until your income rises again.

Set up payment plans

Losing your source of income can be stressful, especially when you have ongoing payments to meet. If you’ve put together your new budget and you’re not sure you’ll be able to meet your regular payments, speak to your mortgage lender and other providers about setting up a payment plan. The important thing is that you do this proactively and keep communication open as having these conversations now will put you in a much better place to negotiate.

See what support you may be entitled to

The government has announced a range of support packages available to people who have lost their source of income or have had their income significantly reduced. Check which support you may be eligible to receive and organise all of the details you need to apply. Full details about the Federal Government’s measures to support individuals and businesses are available on the Treasury website.

If you’ve lost your income due to illness or injury and you have income protection insurance, check what claims you are eligible to make and what payments may be available to you.

Identify potential savings

When you put together your new budget, you will probably identify expenses you could do without such as gym memberships and other discretionary expenses. To identify further savings, check if you can
switch to cheaper providers for your utilities such as electricity, gas, and internet and consider winding back your mortgage payments if you have been paying extra.

Seek advice from financial professionals

In stressful times, it can be hard to look beyond the current period of financial stress. However, this is also an opportune time to reset your financial plan for the future. Take this opportunity to speak with
your financial professionals, including your mortgage lender or broker, accountant, and a financial adviser to manage your finances now and into the future effectively.

Moving forward

At a stressful time for people, it’s important that you don’t feel like you need to weather financial challenges alone. Taking the time to see what support may be available through the government’s support packages is a good place to start. And to set up a financial plan for the future that also addresses your current financial challenges, make sure you speak to a qualified financial professional for tailored advice.

 

Chris Connolly

Connolly Wealth Management
Level 1, 441 South Road
Bentleigh  VIC  3204

(P) 03 9591 8000
(F) 03 9530 8375
(E) chris@connollywealth.com.au
(W) www.connollywealth.com.au

Disclosure: Christopher Connolly (280099) and Connolly Wealth Management Pty Ltd (333350) are Authorised Representatives of Wealthsure Financial Services Pty Ltd AFSL 326450.

 

Sources:
https://www.abc.net.au/news/2020-05-
05/almost-one-million-australians-losejobs-due-to-coronavirus/12215494 “Almost
a million Australians out of work due to
coronavirus; RBA tips economy to take
10pc hit” ABC News (5 May 2020)
https://theconversation.com/90-out-ofwork-with-one-weeks-notice-these-8-
charts-show-the-unemployment-impactsof-coronavirus-in-australia-136946 “90%
out of work with one week’s notice. These
charts show the unemployment impacts of
coronavirus in Australia” The Conversation
(28 April 2020)
https://www.ato.gov.au/general/JobKeeper
-Payment/ “JobKeeper Payment” Australian
Taxation Office (16 April 2020)
https://treasury.gov.au/coronavirus/busine
sses “Support for Businesses” Treasury
(2020)
https://treasury.gov.au/coronavirus/house
holds “Supporting Individuals and
Households” Treasury (2020)
https://treasury.gov.au/coronavirus/busine
ss-investment “Supporting the Flow of
Credit” Treasury (2020)

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