Brisbane based financial adviser, Cara Williams, and Rebecca Maher, Managing Director of Proforce Wealth, offer budgeting tips that can help prevent financial stress during times of economic uncertainty.
Create a monthly budget
Rebecca: During a downturn you need to be 100 per cent across your finances and have a monthly budget. You need total clarity on your cost of living. There are two good reasons to get across your finances now:
- You've got time, which makes it easier.
- Extra motivation. You want to alleviate as much stress as possible from your current situation.
Review your expenses
Cara: This downturn is a great time for everyone to review their budget: cash flow, income, expenses going out.
Look at everything and see what you can change or cut back on.
Many people are staying home, and while streaming services are great, is there something else you can do that doesn't cost anything and save you some money?
Protect your mortgage
Rebecca: Your mortgage is your largest expense.
Many banks are offering mortgage freezes for six months, and you can also look into the government’s stimulus and relief packages.
Rebecca: For many families, childcare is another big household expense. In early April, the Prime Minister announced parents who needed to keep sending their children to childcare did not have to pay any fees.
Find out more about the government’s childcare subsidies.
Try to boost your savings
Cara: One of the benefits of working from home is that you spend less on petrol, commuting, clothes, coffee and food.
What you’re not spending at the moment will add up and can be put into savings.
Reduce your bills
Cara: Call all your utility providers and insurers and see if they’re offering payment relief. Find out what you can put on hold or defer.
Get advice before you access any superannuation
As of 27 April 2020, the government changed the rules for superannuation to allow people to withdraw up to $10,000.
Be aware however, accessing funds from your super should be seen as a last resort and will hurt you down the track – but it’s an option if you’re facing financial hardship. Talk with a financial adviser if you're considering this option.
Swap luxe for less
Switch to generic brand groceries and pharmacy items. Try brands you don’t usually buy to save money wherever you can.
Boycott the Pink Tax!
Cara: The pink tax is an extra cost that applies to women’s healthcare and personal products.
The male equivalents are cheaper so opt for men’s razors, shampoo, and deodorant. No one will know you’re using a blue razor.
Don’t put your head in the sand
Rebecca: Avoiding making decisions and letting things pile up is the worst thing you can do. Put an emergency plan together and get advice.
Seek expert advice
Cara: If you don’t feel well, you see a doctor. If something needs fixing, you call a tradesperson. Having a financial adviser is important when everything's going well – but especially during a downturn. We’re like a doctor for your finances. We can help you through this.
Find an Adviser to help you manage your money during a downturn