How to get on top of your finances during COVID-19

author-avatar By on May 21, 2020
How to get on top of your finances during COVID-19

Photo by Johanna Buguet on Unsplash

The Financial Planners Association of Australia (FPA) has released a free guide to managing finances as COVID-19 rocks the economy.

Labelled 'Financial planning in uncertain times', the FPA has designed the guide to help consumers manage their finances during the crisis, and to better equip them post-COVID-19.

FPA chief Dante De Gori cautioned consumers to "tread cautiously" before they feel confident in the economic situation.

"The financial impact of COVID-19 is deeper than it currently appears," he said.

"While Australia might be reopening for business soon, lost income and household debt means consumers are not going to rush into their pre-COVID spending right away."

The guide comes at a time when many are considering withdrawing their superannuation, with more than a million Australians having done so in just three weeks.

The three key steps are below.

Need somewhere to store cash and earn interest? The table below features introductory savings accounts with some of the highest interest rates on the market.

Provider
Total
interest
rate p.a.
Intro
interest
rate p.a.
Intro
term
Base
interest
rate p.a.
 
Online Saver
1.55% 1.20% 4 months 0.35% Go to site
1.75% 1.75% 4 months 0.00% Go to site
2.20% 1.40% 4 months 0.80% More details
2.00% 1.45% 4 months 0.55% More details
2.00% 0.65% 4 months 1.35% More details

*Data accurate as at 07 August 2020. Rates based on a savings balance of $10,000. Sorted by total interest rate. Refer to providers' websites for bonus rate conditions. Note that the base rate will apply once the introductory term has passed.

Managing cash flow

The first step is to prioritise managing cash flow, according to Mr De Gori.

“There isn’t a lot you can control right now, but one area you can control is your cash flow,” he said.

“Can you temporarily scale back your monthly mobile phone plan? Can you save on one or more utilities by switching providers?

"Challenge yourself to see how much monthly cash flow you can free up among your regular expenses.”

Cutbacks can also include non-essential items such as takeaway meals, forgotten direct debits, monthly subscriptions you don't use and so on.

Consider a side hustle

While it's not for everyone, the FPA says at least consider it.

This doesn't necessarily mean letting stinky customers into your car as part of ridesharing, but could include freelancing or consulting, using your skillset.

Selling unwanted items around the house such as old clothes, mobile phones, gaming consoles and more can also yield some pocket money.

Beware of scams

Mr De Gori has urged Australians to keep their eyes out for COVID-19 related scams.

“When you’re rushing to secure your finances amid a full-blown crisis, you might be more susceptible to falling victim," he said.

“Scammers are always looking for opportunities to take advantage of the vulnerable, which makes seniors especially susceptible to financial exploitation at this time.”

Many scams include impersonating Centrelink or MyGov, trying to get customers to give up their personal details to receive stimulus payments. 

The Australian Competition and Consumer Commission (ACCC) has seen about 100 scams related to coronavirus and stimulus payments since the start of the year.

Mr De Gori urged Australians not to provide personal details over the phone or via email, especially if they did not initiate the contact.

Plan for the future

While the light at the end of the COVID-19 tunnel can seem dim, Mr De Gori says there is still life after the pandemic, so it's important to plan for the future.

“There is life outside of and beyond the current situation. Take this time to plan, plan, plan,” he said.

“Even amid the virus-related restrictions in place, there are many financial professionals available for virtual or phone conversations to help you get to the other side."

Finance basics for children

Suncorp has partnered with the charity Financial Basics Foundation to launch a free online resource kit called Financial Rules of Thumb.

The guide is designed to help parents talk to their children about money.

Financial Basics Foundation chair Brigid Leishman said children deserve every chance to learn about the basics of money.

“As communities face the economic and social impacts of COVID, hundreds of thousands of young people have lost their jobs, families are being forced to prioritise their spending on essentials – it’s a very tough lesson,” she said.

“Through the online kit, we’re helping to equip parents and carers with an easy online toolkit to help them reinforce good money habits with their kids.”

Late last year, research revealed nearly a quarter of Australians weren't taught about money as children, while another study found 40% of Australians wish they'd have been taught more about finances as a kid.

Research from the Organisation for Economic Cooperation and Development (OECD) also found in ten of 13 countries, discussing money matters with parents was associated with children having a higher level of financial literacy.

Suncorp chief Lee Hatton said the Financial Rules of Thumb guide aims to equip young people to take charge of their financial future.

“Australian teenagers are digitally savvy so we’re bringing learning to life through digital to give them hands-on experience in budgeting, investing or paying bills," she said.

“Educating our children on the financial basics will help them weather challenging times later in life."

The five tenets of the Financial Rules of Thumb guide are:

  1. Pay yourself first: Always put aside a portion of your money for savings.
  2. Spend less than you earn: Make a budget, so you know exactly what you can afford.
  3. Shop around: Compare and shop around, you might find it cheaper.
  4. Time is money: The longer you save, the more interest you can make.
  5. Sleep on it: Don’t rush into big purchases, take time to think it through.

Latest Articles

author-avatar
Harrison joined Savings in 2020. He is a journalist with more than four years of experience, with previous stints at News Corp and financial comparison site Canstar. With a keen interest in personal finance, Harrison is passionate about helping consumers make more informed financial decisions.

Collections:

Get free insights & tips monthly

By subscribing you agree to the Savings Privacy Policy

Loading data please wait...

{{returnData.productName}}

Overview

Current Rate

{{returnData.currentRate | percentage:2}}

Comparison Rate*

{{returnData.comparisonRate | percentage:2}}

Rate Type

{{returnData.rateType}}

Advertised Rate

{{returnData.advertisedInterestRate}}

Comparison Rate*

{{returnData.comparisonRate}}

Monthly Repayment

{{returnData.monthlyRepayment}}

Interest Type

{{returnData.interestType}}

Total Interest Rate

{{returnData.totalInterestRate | percentage:2}}

Base Interest Rate

{{returnData.baseInterestRate | percentage:2}}

Bonus Interest Rate

{{returnData.bonusInterestRate | percentage:2}}

Total Interest Rate

{{returnData.totalInterestRate | percentage:2}}

Introductory Rate

{{returnData.introductoryRate | percentage:2}}

Introductory Term

{{returnData.introductoryTerm}}

Base Interest Rate

{{returnData.baseInterestRate | percentage:2}}

Term

{{returnData.term}}

Advertised Interest Rate

{{returnData.advertisedInterestRate | percentage:2}}

Interest Frequency

{{returnData.interestFrequency}}


Fees and Features

Ongoing Annualised Fee

{{returnData.annualFee}}

Upfront Fee

{{returnData.upfrontFee}}

Offset Account

Redraw

Principal & Interest

Interest Only

N/A{{returnData.interestOnly}}

Max loan to value ratio (LVR)

{{returnData.maxLVR | percentage:0}}

Lump sum repayments

N/A

Additional repayments

Maximum Loan Term

{{returnData.maximumLoanTerm}}

Upfront Fee

${{returnData.upfrontFee}}

Ongoing Monthly Fee

{{returnData.ongoingFees}}

Early Repayment Fee Applies

N/A

Vehicle Types

{{returnData.vehicleType}}

Maximum Vehicle Age

{{returnData.maximumVehicleAge}}

Pre Approval Available

N/A

Online Application

N/A

Account Keeping Fee

{{returnData.accountKeepingFee}}

Minimum Monthly Deposit

{{returnData.minMonthlyDeposit}}

Linked Account Required

N/A

Interest Calculated

{{returnData.interestCalculated}}

Interest Paid

{{returnData.interestPaid}}

Online Application

N/A

ATM

N/A

EFTPOS

N/A

Account Keeping Fee

{{returnData.accountKeepingFee}}

Minimum Monthly Deposit

{{returnData.minMonthlyDeposit}}

Linked Account Required

N/A

Interest Calculated

{{returnData.interestCalculated}}

Interest Paid

{{returnData.interestPaid}}

Online Application

N/A

ATM

N/A

EFTPOS

N/A

Minimum Deposit

{{returnData.minDeposit | currency : '$' : 0}}

Upfront Fees

{{returnData.upfrontFee | currency : '$' : 0}}

Annual Fees

{{returnData.annualFee | currency : '$' : 0}}

Notice Period to Withdraw

{{returnData.noticePeriodToWithdraw}}

Online Application

N/A

Automatic Rollover

N/A

Maturity Alert

N/A