How to reset your budget and get financial help in 2020
Shaun Caratozzolo was badly hit during the pandemic, losing 90 per cent of his income. he took out $20,000 from his super. But one other move saved his family.
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Millions of Australians have been forced to reassess their budgets and ensure they don’t get caught out again financially if another disaster strikes.
On Tuesday the Treasurer Josh Frydenberg will be delivering the Federal Budget which many people will be hoping will bring them some urgent financial relief.
But new independent research conducted on behalf of the Financial Planning Association of Australia which quizzed 2000 Australians found the following:
• 70 per cent believe they could have done more to improve their financial position.
• 46 per cent felt in control of their financial position.
• 13 per cent have engaged a financial planner at some point.
And the biggest financial worries for most people include depletion of savings, job insecurity, and erosion of super.
Shaun Caratozzolo, 41, who runs a leadership and sales development business in the travel industry, has been badly hit during the pandemic, losing 90 per cent of his income.
His wife, Angela, 37, works as an administrative assistant and increased her hours in order to help the couple and their four children financially survive.
They deferred the $450,000 mortgage on their four-bedroom Perth home and Mr Caratozzolo signed up to the Federal Government’s JobKeeper scheme.
“We saw a financial adviser to get help, took a six month repayment holiday on our mortgage, we lowered our food budget and we reviewed our insurances,” he says.
“I also took $20,000 out of my super to start a new corporate travel booking business.”
Caratozzolo says seeking financial help, “saved our lives, I don’t know if we could have made it through”.
FPA’s chief executive officer Dante De Gori says the pandemic has created “awareness around saving for a rainy day”.
“There were many businesses that were operating at full capacity and then the next day they were shut down,” he says.
“No-one could have predicted that having emergency funds is really important.
“Most people can probably sustain it for up to four weeks but if you were to sustain it for three months or up to six months can you do that.”
De Gori says the cost of a financial planner can range between $2500 to $3500 to set up a plan and then about $3000 to $3500 annually.
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Financial Counselling Australia’s chief executive officer Fiona Guthrie says the first thing anyone should do if they are experiencing financial hardship is to speak to their creditor.
“If you need more help or you are overwhelmed speak to a financial counsellor by ringing the National Debt Helpline,” she says.
“The world is uncertain at the moment and there’s nothing to be lost by picking up the phone and speaking to a financial counsellor, you’ll get a listening ear.”
SEEKING FINANCIAL HELP
• As soon as you get into financial difficulty seek help.
• Contact your lender/creditor if you need assistance.
• Speak to your creditor’s hardship team.
• Seek financial counselling help by contacting the National Debt Helpline on 1800 007 007.
• Find a financial planner, make sure they have an Australian financial services (AFS) licence.