Mass unemployment and a lingering recession have made it hard for many individuals and families to survive from day to day financially. While the Australian government JobKeeper and JobSeeker benefits have provided some relief for already low-income earners, the rate is set to rewind within the next few weeks — plunging our country’s most vulnerable back under the poverty line.
Your job may have cut your hours or made you redundant, which is a severe strain on anyone’s finances. The good news is that there are ways to boost your financial health during the pandemic and start to regain some of your losses.
1. Create a budget
Take the time to get together your household expenses, and write down what payments need to be made every week, fortnight, or month (depending on your pay cycle). By dividing bills and other expenses into weekly increments, you’ll ensure that these expenses are covered once the next bill comes in. Some companies even do this for you, to help eliminate ‘bill shock’ once the quarterly amount comes in.
Writing up a budget is a great way to find holes in your finances where you might be able to save some cash. Certain luxuries can be given up during this time to help regain some of your lost finances, such as gym memberships, cutting back on cigarettes or alcohol, or getting takeaway food only once a week. These small sacrifices can end up in huge savings in the short term — $20 a week at the gym, cutting back to only around $50 of cigarettes and alcohol per week, and eliminating takeaways results in a saving of up to $200 per week. That extra $200 will definitely come in handy for rebuilding your finances.
If you have difficulty managing your finances, it might be a good idea to seek out an expert to help you. Financial planners and professional budget managers will be able to help you identify the problems and pros of your current spending, and come up with a new budget and system that works for you.
2. Look at your existing skills
If you’ve found yourself in the unemployment line and job prospects are looking grim, you might want to rethink your entire strategy. Take a look at the existing skills you already have. Are you an ace administrator? Can you build things? Have a sewing hobby?
These skills might convert into cash. You might want to think about opening up a small business or letting others know what services you can provide. A positive side effect of Corona is that society has become a lot more understanding of current financial difficulties and are seeking to purchase from small and local businesses more than ever before.
3. Have a spring clean
Lockdown is the perfect time to get your house and affairs in order. It’s a good idea to go through those storage cupboards and full corners of your house to see if you’ve got anything worth selling. Household items, books, decorations, luggage, bedding, and old furniture all spell gold. Clear out the clutter and start turning it into cash. Places like eBay, Gumtree, and Facebook Marketplace are the best places to post your unwanted goods for a bit of extra money.
4. Look into refinancing
Finally, you could look into refinancing an existing loan. According to research by Plenti, “Debt consolidation was the most common motivation across all three sampled demographic segments. 37.4% of boomers, 37.1% of millennials and 39.6% of Gen X said they were borrowing to consolidate debt.”
This is why it might be a good idea to have a chat with your bank manager to see what can be done to ease the financial pressures during this time. Many banks put in safeguards at the beginning of the pandemic — such as three months of relief from credit card repayments, as well as lowering interest rates on personal loans, mortgages, or student loans. It’s a good time to take full advantage of these lowered interest rates whilst they are in place, as it’s unlikely these levels will ever be implemented again post-pandemic.
Doing what you can to keep your finances healthy
Keeping up your morale when finances are tight is tricky, but not impossible. There are so many strategies to help pick up where your cash flow dropped off. It’s time to think outside the box and explore ways of making money that you’ve never dreamed of before.
Rather than thinking about your cash issues as a challenge, see them as an opportunity. You are in a position to make the future more abundant with a little extra work now.
This is a guest post byLuke Fitzpatrick. He has been published in Forbes, The Next Web, and Influencive. He is a guest lecturer at the University of Sydney, lecturing in Cross-Cultural Management and the Pre-MBA Program. Connect with him on LinkedIn.