What options do they have?

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Australians struggling with their finances are urged to seek help as the federal government and banks step up their COVID support programs.

Disturbing ABS research, released last month, shows that 17.5% of households cannot raise $ 2,000 in an emergency.

The ABS survey of the household impacts of COVID-19 in May also found that 5.4% of households could not even get $ 500 in cash in a week.

Recent closures across the country have once again put many on the back burner as businesses have been forced to shut down and casual workers have had their hours cut.

Ability of household to fundraise for something important within a week

(people aged 18 and over)

Able to raise $ 2,000 76.2%
Able to raise $ 500 but not $ 2,000 12.1%
Unable to raise $ 500 5.4%
I do not know 6.1%

Source: ABS Household Impacts of COVID-19 Survey, May 2021 with 3,371 participants, published June 16.

If households could fundraise for something important in a week

New South Wales CIV QLD HER Washington Rest of AUS
Able to raise $ 2,000

74.5%

79.9%

75.3%

69.8%

75.9%

81.4%

Able to raise $ 500 but not $ 2,000

11.3%

10.7%

14.6%

14.6%

12%

10.4%

Unable to raise $ 500

6.6%

3.9%

5.5%

7.7%

4.7%

4.5%

I do not know

7.6%

5.4%

4.1%

7.7%

7.3%

3.4%

Source: ABS Household Impacts of COVID-19 Survey, May 2021 with 3,371 participants, published June 16. The rest of AUS is Tas, ACT, NT.

the APA Impacts on households of the COVID-19 survey also found that 20% of Australians said their household needed to take financial action to pay for basic expenses due to a lack of money.

The most popular options were savings, increasing credit card spending, borrowing from family or friends, and selling household items and jewelry.

RateCity.com.au Research Director Sally Tindall said: “It is incredibly concerning that more than one in six Australian households cannot raise $ 2,000 for an emergency.

“What COVID has taught us is that without any warning our world can be turned upside down and we can suddenly find ourselves without enough money,” she said.

“For households in financial difficulty, don’t be afraid to ask for help.

“Banks are there to support people in serious financial difficulty, but they don’t automatically grant mortgage deferrals. They will assess people on a case-by-case basis to see if there is a better way to provide relief.

“If you need help paying the mortgage, be sure to let the bank know in advance so that hardship measures can possibly be put in place before you default.

“Don’t just ask your bank for help. Make a list of all your invoices and contact each supplier to see what assistance they can offer.

“Sometimes just switching to a more economical plan or switching to a cheaper provider can help you get by,” she said.

What to do if you can’t pay the bills

  1. Seek help from all of your bill providers, not just your bank.
  2. Press pause on non-essential expenses.
  3. Find out what government assistance you are entitled to. COVID Disaster Payments are available to eligible people in a hotspot (currently Greater Sydney), with the government lifting the asset test for the third week of the Sydney lockdown.
  4. If you need emergency cash, see if you qualify for an interest-free loan from Good Shepherd (nils.com.au) or one crisis payment by Centrelink.
  5. Call a financial advisor for advice. the National Debt Helpline is: 1800 007 007.

Tips to help you build up your savings:

Find better dealswhether it’s your mortgage, internet, telephone, or gas and electricity supplier.

Sell ​​your spare things. If you’re not confined, hop on Gumtree or the Facebook Marketplace and sell anything that might collect dust in your house.

Collect reward points. If you don’t have a savings reserve, consider cashing them out for supermarket vouchers and put that money into your savings account instead.

Commit to a month of non-essential expenses. Everyone has to let go, but if you can live frugally for a month or more, you could save hundreds.

Put your savings somewhere safe (but productive). Home loan is a great place to store emergency cash because it will help lower your interest bill at the same time. Otherwise, consider a high interest savings account. The highest current savings rate on RateCity.com.au is 1.35% if you meet the terms and conditions.

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