A simple step to manage your money during COVID-19
COVID-19 has dished up some scary numbers. Millions of Australians have been stood down or had their work hours cut, and that’s created some serious financial fallout.
The COVID-19 pandemic has forced all of us to take better care of our health. That’s a good thing, but it has been a challenging time for our financial wellbeing too. Industry super fund-owned bank ME share how one step can make a big difference.
A study by the Melbourne Institute found one in three Australians are feeling financially stressed 1. Separate research by industry super fund-owned ME Bank found 44% of Australians expect the COVID-19 crisis to have a negative effect on their household’s finances long term 2.
During these uncertain times, it’s worth turning our focus to better managing our money. And one of the best tools to start the process, is a household budget.
Small spends can really add up
A budget can help you navigate a financial path through the crisis by revealing two important things: how much money is coming in, and how much is going out.
Working out your income is usually pretty straightforward. What’s often less clear is how much we spend.
That’s why it can be so useful to spend a few weeks listing everything you spend. Plenty of apps are available that make this a breeze. What matters is that you record all your spending – from big bills right down to those ‘treats’ like a coffee or Friday night takeout.
Don’t forget to check your bank statements too. These can show direct debits for subscriptions or other services that you may use only infrequently.
Use your budget to cut back
It can be confronting to realise just how much we spend each week – and how the little things can quickly add up. The beauty of your budget is that it makes it a lot easier to see where you can cut back.
Any costs that you’re able to trim mean more money to manage debt or grow a buffer of savings – cash that can come in very handy during a rough patch.
Look for better deals
Reviewing your budget also helps you identify big expenses where you may be able to get a better deal.
Chances are, for instance, that your car insurance is automatically renewed each year. By shopping around ahead of renewal time, it may be possible to pocket savings on premiums by switching to a different insurer. A few dollars saved here and there add up over the course of a year. So, it’s worth the effort of heading online to compare costs and know if you’re paying more than necessary on big bills.
To help Australians take care of their financial health during COVID-19, ME has launched a new online learning module as part of its free Ed financial wellness series. The module covers budgeting tips – and more, including income support options and managing job loss. You can check it out here.
This article is brought to you by ME. For more information, please visit www.mebank.com.au
Members Equity Bank Limited ABN 56 070 887 679 AFSL and Australian Credit Licence 229500.
1 Melbourne Institute, Three in ten financially stressed over impact of COVID-19, viewed 29 July 2020
2 ME Bank, One third of Australians see incomes fall, viewed 29 July 2020