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Lost your job or income due to coronavirus? Follow this checklist.
By MyBudget Editor

Up to 2 million Australians are expected to lose their jobs and even more will have to adjust to smaller pay packets. If it happens to you—or it’s happened already—the most important piece of advice we can offer you is to come up with a plan and, to help with that, we’ve come up with a checklist.

1. Don’t panic

On the one hand, it’s never good to be out of work. On the other, Australia’s welfare benefit net just got stronger and there are multiple forms of financial assistance on offer.

Plus, the energy spent on panicking would be better channelled into planning. Even though you may not be able to anticipate every unknown, a plan will help you prepare for most eventualities.

2. Talk to your employer

The three major federal government unemployment initiatives include:

  • Loosening eligibility for the JobSeeker benefit;
  • Adding the Coronavirus Supplement to a range of existing benefits (which effectively doubles the JobSeeker payment), and;
  • The new JobKeeper program which funds eligible businesses to keep paying regular employees, casual and contract workers.

It’s not possible to claim JobSeeker and JobKeeper at the same time, so the first step is to find out if your employer will be accessing the JobKeeper program. If so, they will handle the paperwork and pass the payments onto you.

It will of course be important to understand if your employer will be paying you your normal wage or a reduced amount. JobKeeper pays $1500 per worker a fortnight.

Our Guide to Financial Assistance During the Coronavirus Pandemic includes a summary of government assistance schemes as well as other major measures.

If you will not be receiving JobKeeper payments…

3. Contact Centrelink to find out your government benefit entitlements

Centrelink can be time-consuming and initially mind-boggling in its complexity, but the effort is worth it. Fortunately, most of it can be done from home via the MyGov web portal.

This article provides a step-by-step guide to applying for Centrelink benefits.

Be prepared to put aside a chunk of time to work through the process. So, take some deep breaths, make a coffee and settle in. Once you’ve gathered and submitted all the appropriate documents, you can then make a claim.

After submitting your claim, you wait. (Given the current circumstances, we’re unable to estimate how long.) Centrelink will let you know if your claim has been approved, what your payment amount will be, your fortnightly payment dates, any backdated payments, and other details.

In the meantime…

4. Work out your essential living expenses

Print off or pull up your last three or four months of credit card and bank statements—six months is even better. On the first pass, highlight and add up all of your fortnightly essential living expenses, plus your cost of housing and keeping your car on the road.

In other words:

  • Groceries;
  • Petrol or other transport;
  • Medicines and medical visits;
  • Power and utilities;
  • Rent or mortgage;
  • Insurance premiums;
  • Registration, as well as;
  • Any other essential expenses in your budget (e.g. pet medications or vital equipment hire.)

In budgeting-speak, these are your non-discretionary expenses—the amount of money you need to live and keep a roof over your head and a car on the road.

Is money going to be tight? Does it leave no room for, say, car or home repairs or buying extra groceries?

We would expect money to be tight for most people. If so, keep reading…

5. Work out your non-essential expenses

On the second pass of your credit card and bank statements, highlight and add up how much you’re spending every fortnight on everything else. To get a fortnightly figure (in keeping with Centrelink payments), you’ll need to average the total.

In budgeting-speak, these are your discretionary expenses—the amount of money you spend on things you don’t really need. This is your opportunity to reduce your costs by cutting non-essential expenses out of your budget. (Remember, it’s not forever—just while you get back on your feet.)

It might be helpful to organise your discretionary expenses into two lists: 1) things you don’t need and are happy to live without and 2) things you don’t need and you’d really like to keep. For instance, nobody needs Disney-Plus, but it sure comes in handy for keeping isolated kids entertained!

At MyBudget, we’re finding that we’re helping clients to rearrange their spending to account for social distancing measures. The money they would have spent on, say, petrol or going out or their gym membership, is being redirected to buying extra groceries, increasing their savings or covering income loss.

Need help creating a budget and planning your expenses? Download our free budget template here.

6. Talk to your lenders and creditors

Now that you’ve created a budget, you’ll have a clearer picture of your bills and spending habits. If you think you’re going to have trouble meeting your regular financial obligations, such as rent, mortgage or bills, now is the time to act early.

At MyBudget, we’re talking to our clients’ creditors for them and getting payment arrangements in place so they don’t pay late fees or incur unnecessary interest charges.

Likewise, you can do the same—contact your lenders and creditors sooner rather than later to explain your situation. Most creditors want to help, especially if you have a good payment history and you stick to your payment plans.

7. Prioritise your bills

In the current environment, not all bills are equal and, when money is tight, your expenses need to be prioritised accordingly.

Your top priority should be to have money in your pocket for essential living expenses. Rent or mortgage repayments, plus keeping the lights on, would normally be included in your essential living expenses. However, there’s a current six-month freeze on rental evictions and power disconnections.

This doesn’t mean that you can ignore those bills, but it does mean you’ll experience more leniency than usual when it comes to putting payment plans and hardship arrangements in place when you contact your providers.

If you’re a tenant, where possible, we recommend trying to maintain a positive relationship with your landlord. Keep them updated about your situation and use your budget to work out what sort of payments will be affordable.

(You can see now why the budget you created in steps 3 and 4 is the foundation for managing your money as you navigate through your bills and commitments.)

If you’re a mortgage holder or have a loan…

8. Talk to your bank or lender

For borrowers affected by coronavirus impacts, the major banks are offering mortgage repayment pauses and other hardship measures.

This article is a useful guide to the range of lending relief measures and how to apply for hardship. Alternatively, MyBudget may be able to speak to your creditors and bank for you.

If you’re reading this article as a mortgage holder who still has their job, it’s definitely worth getting a home loan health check. With the official interest rate so low, one of the ways we’ve freed up cash for a number of MyBudget clients is by helping them to refinance their mortgages or consolidate debts.

Our MyBudget Loans team has been saving clients around $400 a month compared with their previous repayments.

9. Get free help

These are truly weird times and it’s not reasonable to expect that the average person would know how to deal with every curve ball. Everybody—even the government and big corporations—are struggling to keep up with the constantly evolving situation.

That’s why helping people to navigate through the current environment is one of the most important services we can offer at MyBudget.

You don’t have to be a MyBudget client to benefit. We’re also providing free phone consultations for everyone. You’re under no pressure to join and the budget plan we create for you is yours to keep.

If you wish, we can manage your budget for you—in which case, we’ll do all the legwork—or you’re welcome to take your budget and manage it yourself. It’s all about having a deep, detailed understanding of your financial position and feeling prepared for whatever comes your way.

10. Lastly, what NOT to do

Avoid keeping up your usual spending habits if it means paying for your lifestyle on credit card.

Likewise, don’t eat up your savings too quickly. It’s better to reduce your spending to live within your new means.

Avoid ‘buy now pay later’ schemes, like Afterpay, and other commitments that may become unaffordable if you lose your job or income.

Don’t put your head in the sand. Talk to your creditors sooner rather than later if paying your bills is going to be difficult.

Don’t be afraid to ask for help. Talk to your employer, reach out to Centrelink, book a free budget appointment with MyBudget or whatever else is going to help.

And to repeat step 1: Don’t panic—for every financial problem there’s a solution, including this one.

We’ll get through this together!

For more money saving tips like this, subscribe to the MyBudget Blog and follow us on Facebook.

Or why not start today? To book your free phone appointment contact MyBudget on 1300 300 922 or enquire online. The customised budget we design for you is yours to keep.

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