The Coronavirus pandemic has turned our lives upside down. From lockdowns to layoffs, things just aren’t what they used to be. But some simple steps can help your finances weather the storm.
It’s fair to say that few of us saw the pandemic coming. That means most Aussies didn’t have time to prepare. However, it’s not too late to take action. Check out our five top tips to keep your finances in the best possible shape during these challenging times.
1. Draft an emergency budget
Take charge of your money by drawing up a budget. It will show how much cash is coming in, and where it’s going out. Better still, your emergency budget can highlight areas to cut back, and how much you can save by focusing on needs rather than wants.
Make budgeting easy by heading to Community First’s online Budget Planner, and regain control of your cash.
2. Contact creditors early
If you’re struggling to meet regular bills and loan committments, take action early. Put your pride aside, and speak with creditors before you miss a repayment. Simply skipping bills and repayments could impact your personal credit rating.
Utility providers such as phone and power companies, will often work with you to agree on a manageable payment plan. This is where your budget comes in handy as it lets you take the lead and suggest payments you can realistically handle.
3. Understand your home loan options
Home loan lenders like Community First are here to help. If keeping up your home loan repayments is proving to be a challenge, it’s important to talk to us.
If you’re ahead with your loan, you may be able to take a break from repayments. Where that’s not the case, you may be able to switch to interest only payments for a period (if you’re currently making principle and interest repayments) You may also be able to defer repayments for a time. The main point is that you don’t have to stress in silence. Talk to us to understand your options.
4. Emergency super withdrawals
If you’re strapped for cash, money sitting in super can look very tempting. So it’s good to know the Federal Government is letting Australians experiencing financial stress dip into their super early.
Strict conditions apply. You need to be unemployed, or have been made redundant or experienced a 20% fall in income (or turnover if you’re self-employed) since 1 January 2020. If that sounds like you, it’s possible to withdraw up to $10,000 from your super before 30 June, and if necessary, withdraw another $10,000 between 1 July and 30 September 2020.
The drawdowns aren’t taxed, and the cash won’t count towards Centrelink benefits. But it is still important to consider the impact on your retirement nest egg.
According to Industry Super Australia, drawing $20,000 out of your super today could mean having up to $120,000 less in super by the time you retire.
5. Save on credit card interest
Interest rates may be at record lows but some credit cards are still charging close to 20% interest. During uncertain times, you may be less likely to pay off the balance in full each month too, which means you’re paying interest. No matter what rate you’re paying, switching to a 0% balance transfer deal can see you pocket big savings in card interest at a time when every dollar counts.
Talk to Community First about our latest balance transfer offer on our Pink Visa, which helps fund McGrath Foundation Breast Care Nurses, or our Blue Visa, which supports the Prostate Cancer Foundation of Australia.
Above all, taking care of your health matters right now. But your financial wellbeing is important too. To find out how we can help, just call Community First on 1300 13 22 77.
Last updated: 21 May 2020
The information contained in this article is only correct at the point of time of publication. It is general information and has been prepared without taking into account your personal circumstances, objectives or needs. Please consider if this information is right for you before making a decision to acquire any product.