COVID cash crunch: How to survive on a single income
A growing number of Australian families face a shift to single-income households as COVID smashes jobs and relationships. Here’s how they can adapt.
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A spike in single-income households looms as COVID-19 ravages jobs and families.
Single incomes also stem from breakups and new babies, and financial adviser and author Helen Baker, inset, says cutbacks will be necessary.
“If you have a household budget, revisit it and adapt it to your changed circumstances,” she says. “If you haven’t got one, now is time to start.”
Baker says single-income parents should learn to say no to children who are accustomed to a previous standard of living, and should review all bills.
“Shopping around can deliver substantial savings on things like insurance, mortgage rates, phone and energy bills,” she says.
“You may not even need to switch – simply ask your current provider for a better rate in line with what competitors offer.”
Don’t try to go it alone, Baker says. “Reach out to family and friends for emotional support. Seek financial support too, from licenced accountants and advisers rather than well-meaning friends.”
Sort My Money founder David Rankin, right, says COVID-19 is delivering a double-whammy on jobs and families.
“One of the main causes of relationship breakups is financial stress, and a key outcome of COVID is financial stress,” he says.
His top tip for living on a single income is to make diary notes of regular expenses to avoid getting caught off-guard.
“Diarise electricity bills, gas, mobile phone, internet, council rates, car registration and birthdays – even if it’s just $20 for a nephew,” Rankin says.
Building an emergency fund to cover unexpected expenses is impossible for many single-income families, so Rankin suggests having a credit card with a $1000 limit if you won’t be tempted to load it up.
“If you can trust yourself, a credit card with a $1000 limit just gives you peace of mind,” he says.