How to prepare for a reduction in income
Making every dollar count.
Whether it’s losing your job, taking extended parental leave or becoming ill, there are many scenarios where you may face a reduction in income or earning capacity throughout your lifetime.
RACQ spokesperson Lucinda Ross said creating a budget could help with peace of mind when your income was reduced.
“A reduction in income can be very stressful, but it’s important to stay calm and make a plan,” Ms Ross said.
“Whenever there’s a change to your financial circumstances you should review and update your budget.
“Look at your income and add up all your expenses. Using an online budget planner can be a good place to start when assessing your finances.”
If you need a hand to manage your budget, bills or debt, free financial counselling services provided by the Government could help you to review your situation.
Financial Counselling Australia CEO Fiona Guthrie said seeking assistance was the first step toward getting back on track.
“Financial counsellors are trained to help people who are feeling anxious about their finances and future,” Ms Guthrie said.
“Financial counsellors can advise people on how to access hardship arrangements with all their lenders, they can advise on whether accessing early release of superannuation is a good idea, they can advise on how to ensure people aren’t disconnected from their electricity.”
Quick ways to you could reduce your expenses
- Cancel subscriptions or memberships that you don’t use often, such as streaming services or gym memberships.
- Shop around for deals on essentials such as electricity, petrol, phone and internet.
- Contact your bank and other service providers to ask if you’re getting the best deal.
- Sell unwanted items online.
For more information or to seek help, visit the National Debt Helpline website.
The information in this article has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in the document is general advice and does not take into account any person's particular investment objectives, financial situation or needs. Before acting on anything based on this advice you should consider its appropriateness to you, having regard to your objectives, financial situations and needs.