Get prepared: 5 top tips to survive the COVID-19 crisis

21 May 2020

 

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, 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 Easy Street’s online Budget Planner, and regain control of your cash.

  1. Contact creditors early

If you’re struggling to meet regular bills and loan commitments, 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.

  1.  Understand your home loan options

Home loan lenders like Easy Street 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 repayment) You may also  be able to defer repayments for a time[1].  The main point is that you don’t have to stress in silence. Talk to us to understand your options.

  1. 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 Australian 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[2]. 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[3].

  1. Save on credit card interest

Interest rates may be at record lows but some credit cards are still charging close to 20% interest[4]. During uncertain times, you may be less likely to pay off the balance in full each month too, which means you’re paying interest. Switching to a credit card with a lower rate like Easy Street's Low rate credit card could help you save on interest.

If your goal is to pay off the card and you want to avoid spending what you've paid off, consider switching your card to a low-fuss loan like the Easy Street personal loan. With regular repayments over a set term, you can pay off your credit card once and for all. 

Above all, taking care of your health matters right now. But your financial wellbeing is important too.

 

 

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.