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How to wrestle back control of your finances

It’s no surprise that many of us are doing it tough as a result of the COVID-19 pandemic.

More than one million Australians have lost jobs in recent weeks while many more have had their working hours reduced.

Sadly, the news is expected to get worse before it starts getting better.

According to data from the federal government, the average Australian household spends around $75,000 on living expenses each year, including housing, fuel and power, food and drink, clothing, alcohol and recreation.

When broken down into spend by life stage, a couple with children aged over five but under 14 have the biggest weekly spend at around $2,085 per week, while unsurprisingly a lone person aged under 35 spends the least at around $859 per week.

Yet while it is never easy running a household on a reduced income, there are simple measures you can take to cut back on expenses. Here’s where to start.

Take a tally of where you’re spending your money

Your first step should be to undertake a forensic investigation into how your finances stand.

Itemise your monthly expenses as much as possible, ensuring you separate your essential needs such as housing, food and utilities and your non-essential requirements such as takeaways and digital television subscriptions.

This will give you an honest appraisal of where your finances are and the areas in which you may be able to cut back or cut out altogether.

Check your entitlements

Few Australians ever seek to rely on government assistance to support them through hard times but sometimes they are left with little option. It pays to check if you may be eligible for COVID-19 financial assistance through Centrelink payments or the Job Keeper payment.

Extra income and household support payments for people affected by COVID-19 include:

Request mortgage or rent relief

Having a roof over your head should always be a priority. While it may a difficult conversation to have, it is worth talking to your lender if you have a mortgage, or your landlord or real estate agent if you rent, about what opportunities there are to reduce your payments.

Some banks are offering six-month repayment deferrals on mortgages while some landlords are offering their tenants temporary rent relief.

Find additional savings in your grocery or utility bills

Food is another essential item but there are a range of ways you can reduce your grocery bills.

Try planning meals in advance and only shop for the ingredients you need as a way to cut unnecessary spending. Buy home or own brands where possible as these usually cost less than better known brand names.

Only buy fruit and vegetables that are in season or on sale to ensure you are not paying for convenience, and cook meals like soups and pasta sauces that have lots of leftovers you can freeze for later.

Meat is traditionally one of the more expensive items on your grocery list so consider planning some meals that don’t include mince, chicken, pork, or beef.

When it comes to utilities, consider using a comparison website to compare energy, internet or insurance providers to ensure you’re getting the most economical deal.

Review insurance policies for potential savings

If you’re in the habit of just renewing insurance policies each year without comparing to other providers, you may be in for a shock. It may be well worth your while to contact your existing provider and enquire if there are any opportunities to save money.

For example, I contacted my insurance provider and advised my car usage had changed significantly now that I’m working from home.  My home and contents insurance is with the same company and had been for many years. They reviewed my policies and applied a discount to both, saving me almost $90 per month. That money is better back in my pocket. It’s worth the phone call.

Cancel pay TV subscriptions

More than 14.5 million Australians have at least one pay TV subscription in our homes. While it’s nice to have instant access to our favourite TV series, social distancing rules to restrict the spread of Covid-19 have resulted in a host of new content being online, most of which is free.

So now’s the time to ask yourself, is that Foxtel, Netflix or Stan subscription really necessary?

Request financial hardship for bills

If you are struggling to pay your power or phone bills, contact your provider straight away to explain your situation. They can then advise you how to apply for financial hardship which could result in you paying your bills in instalments or you could receive additional time to pay. Depending on which state you live in, you may even be eligible for a utility rebate or voucher.

Problems paying your strata levy?

Many home owners are experiencing financial hardship as a result of the pandemic. You are not alone. If you’ve had a substantial reduction in your ability to pay strata levies, contact your strata manager in the first instance. Depending on the Owners Corporation/Body Corporate’s independent situation, your strata committee may be able to offer financial hardship assistance to individuals.

Each strata committee must decide the level of assistance they can offer, balancing compassion and ensuring adequate cash flow to cover essential expenditures like cleaning, insurance and keeping the lights on.

That is no easy task, particularly where most committee members are volunteers who may be dealing with their own work and personal COVID-19 disruptions.

If your community is managed by a Smarter Communities company, you can access our Financial Hardship Application Form.

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