Hi Sally G,

We are certainly in strange times at the moment with many businesses being impacted by the lockdowns due to COVID19.  Unfortunately, this has meant that many employees have also been impacted.  Sally, fortunately it sounds like your employer has been able to offer you JobKeeper payments, however this may result in you being on a lower income than usual.

At times like this, when cash flow is tight, it is important to review your budget and spending.  Most people are spending less these days as we can’t travel or socialise as much as normal, but it’s still a good idea to revisit your usual spending patterns and understand where your income is going.  It’s also a great opportunity to review some of the regular expenses we all have such as private health insurance, car insurance, house and contents insurance, utilities providers (water electricity and gas), phone plans and internet.

Another thing that you should review is the interest rate with your bank. Mortgage payments may be one of the largest expenses in your budget, so making sure you are not paying too much is important. You could speak to a mortgage broker to see if you can get a better deal.  At the very least, however, speak to your bank and see whether they can give you a better interest rate or lower any fees.  If cashflow is indeed tight, you may wish to request to change your loan repayments from ‘principal and interest’ to ‘interest only’. Beware though, as this will mean that you are not reducing the principal of your loan and may extend the timeframe to repay it.

So going through all your expenses and understanding where your income goes is a great first step. Then review some of the expenses that you haven’t reviewed for a while.

Building these good habits around regular spending will help the lower JobKeeper payments go a lot further.