It may seem like a no-brainer but managing your finances well can set you up for a solid financial future as well help you deal with bills and expenses effectively now.
Today, we’re going to take a look at some tips to help manage your non-NDIS finances and share information about where to get advice.
According to MoneySmart, there are five steps to getting your debt under control. This process can be used whether you’re paying off a mortgage, credit cards, other loans or a combination.
- Know what you owe. Make a list of all your debts and repayments. Then add them up to see what you owe in total.
- Work out what you can afford to pay. Compare money that comes in with money you spend. If you have more going out than coming in, you may be able to cut expenses or apply for additional assistance. See Living on a reduced income for ideas.
- Prioritise debts. Work out a budget to pay for things like rent, mortgage, rates and utilities such as power and water first.
- Put some money aside as savings. Use savings to build an emergency fund that you can draw on for unexpected large expenses.
- Get help if you need it. Talk to a financial counsellor about your options (see below).
Top tip: Setting up “bill smoothing” may help you to take control of bills such as electricity and water bills. Bill smoothing involves paying smaller amounts more frequently based on an annual plan of equal instalments.
Avoid high interest rates.
If a loan sounds too good to be true, it probably is. A “payday loan” is a short-term unsecured loan that usually lets you borrow small amounts over a shorter period of time.
While it may sound like an attractive quick fix, the trap with payday loans and similar loans with different names is that they come with high interest rates and carry a lot of fees and charges. Ultimately, you’ll be paying back a lot more than you borrowed. Possible alternatives are the NILS scheme and COVID-19 relief loans.
NILS low interest loans scheme.
The NILS scheme provides loans of up to $1500 for people with low incomes to purchase essential goods and services. Loans can be used for car repairs, tyres, medical or dental expenses, education essential, household items like fridges and washing machines and some other items such as household furniture and repairs.
Affordable repayments are set for a 12 to 18 month period. There are around 600 NILS loan providers across Australia and loans are usually approved within two days.
COVID-19 household relief loans.
These interest-free government funded loans mean you only pay back what you borrow. They are designed to help people affected financially by COVID-19 since February 2020 get back on their feet.
A loan of up to $3000 may be available to cover utility bills, rental bonds or rent (if you rent through an agent), council rates and body corporate fees. You’ll need to be able to demonstrate you can repay the loan. Note: the loans are not for cash. Terms and conditions apply.
More at https://householdrelief.org.
Advance Centrelink payments.
Did you know that you may be able to get part of your income support payment or Family Tax Benefit in advance once a year? People receiving the Age Pension, Carer Payment, Disability Support Pension, JobSeeker and several other supplements may be eligible. Advance payments are paid back out of future payments.
For details and how to apply, visit Services Australia.
Tips for managing credit cards.
It’s easy for credit card debt to get out of hand. Here are some tips for managing your credit cards.
- Limit the number of credit cards you have
- Keep the card with the lowest interest rates
- Pay more than the minimum monthly repayment
- Try not to buy things you cannot afford to pay for now
- Take your credit cards out of your wallet so you’re not tempted to use them unnecessarily
- Prioritise paying off debts.
Top tip: If you feel like you’re in over your head with credit card debt, pay off the one with the highest interest rate or the smallest debt first (maintain at least minimum repayments on the others).
Financial support and counselling.
A financial counsellor can help you analyse your spending, manage debts and get your finances back on track. Several free services are available.
Covid Hardship Support hotline.
The service was set up to help people identify financial support available including grants, reviewing household budgets, accessing financial hardship arrangements and referrals to financial counsellors.
Phone 1300 121 130 9am to 7pm Monday to Friday.
More at https://householdrelief.org.
National Debt Helpline.
Offers free online chat and phone chat support with a financial counsellor. They can provide advice if you have trouble paying a car loan, phone bill, credit card or any other debt.
Phone 1800 007 007.
More at https://ndh.org.au/
Small business support.
If your small business has been affected by a bushfire or COVID-19, free help is available from a financial counsellor.
Phone 1800 413 828
Financial Information Service (FIS)
FIS is not a financial counselling service but it does provide free confidential information, tools and resources to help you make decisions about current and future needs. Phone 132 300 and mention “financial information service” when asked why you are calling.
More at Services Australia
Other helpful links