How to handle financial worries and take advantage of COVID-19 lockdown
Australians are being urged to make plans during the COVID-19 lockdown in case of an extended economic downturn and seek assistance if struggling financially.
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Exclusive: One in three Australians have been financially hit during the COVID-19 pandemic and many more expect further pain to their hip pockets in the coming months.
While millions of Australians have suffered job losses or reductions to their incomes in the past month, many cash-strapped people are turning to government relief or dipping into their own superannuation savings in a desperate measure to access funds quickly.
ME’s COVID-19 Financial Sentiment Snapshot report, released Monday, surveyed 1000 Australians this month and found 44 per cent of Australians expected a negative impact on their household finances long term. And worryingly 29 per cent felt insecure about their job.
Tribeca Financial’s chief executive officer Ryan Watson said, regardless of whether households have experienced a drop to their income or not, the flip side was many are spending less during isolation.
He said if possible households should try and maximise this time by tucking away any extra cash they would have otherwise spent on activities.
“This provides people with an opportunity to build up their cash buffer or as we like to call it, your ‘rainy day’ fund,” Mr Watson said.
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“Start putting more money into savings or their home loan offset account just in case the significant economic downturn is with us for an extended period.”
Millions of struggling workers can also access the Morrison government’s JobKeeper payment of $1500 per fortnight for eligible employees which may leave them better off than before COVID-19 struck.
The Morrison government has passed a $130bn support package with a new JobKeeper payment – a wage subsidy to keep Australians in work.
Mr Watson said ideally households should have at least three months worth of household income in a savings account or a loan redraw facility.
Latest ATO data showed more than 881,000 Australians had applied to access their super early and funds will start being released from today.
ME’s spokesman Matthew Read said the biggest concern worrying people was the future of the economy.
“It’s a massive unknown, every day there is new information and things change and (there’s) that uncertainty about what is going to happen, including whether people are still going to have a job,” he said.
“The pressure on households isn’t just financial too, it comes also from working from home and there’s increased stress.”
The report also found of those feeling negative about the economy – 63 per cent were worried about financial uncertainty, 40 per cent said it was because they could not save and 38 per cent said it was because of the negative hit to investments and super.
Mr Read urged people to try and stash cash away while they were spending less and if they were under monetary stress to seek help including contacting their financial institution.