MONEY WORRIES: HOW TO KEEP YOUR HEAD ABOVE WATER
Actors are experts at riding the waves of sporadic income streams, but COVID-19 has caused unprecedented levels of financial stress for many. Economics writer Jessica Irvine offers 10 straightforward ideas to help keep you from going under.
Worrying about money can evoke emotions of fear and overwhelm, even during the good times. But there are ways you can tackle things head-on to bring a greater sense of calm and security to your life — necessary qualities to underpin your ability to flourish in your industry.
1. Ask for help
If you feel you are at a crunch point, now is the time to pick up the phone. The National Debt Helpline is a service that connects you to free financial counselling. Their website also offers a ‘live chat’ feature. You don’t need to be in debt trouble to access the service − simply feeling overwhelmed by your financial situation is enough.
Helpline counsellors can assist you to get clear on your situation and direct you to further support from not-for-profit organisations, such as St Vincent de Paul Society, who can help you navigate Centrelink, or the Financial Rights Legal Centre, who can help you deal with banks, insurers, utility providers or other companies you owe money to. Dial 1800 007 007 (think James Bond!).
2. Access government support
While the government’s initial COVID-19 support programs, like JobKeeper, have been wound up, a host of new schemes exist to help people whose incomes have been affected by COVID, or related lockdowns.
The COVID-19 Disaster Payment is a payment to help workers unable to earn income due to a COVID-19 state public health order. This may involve a lockdown, hotspot or movement restrictions. It gives people who would have worked more than 20 hours $600 a week (up from $500) and $375 a week (up from $325) if you have lost between eight and 20 hours of work a week. You no longer need to have less than $10,000 in liquid assets
The Pandemic Leave Disaster Payment is a lump sum of up to $1,500 for people who are required to self-isolate for 14 days, or to care for someone who has COVID-19.
Not-for-profit organisation Good Shepherd’s Household Relief Loans Without Interest scheme provides access to loans of up to $3,000 for people who have lost a job or been otherwise financially impacted by COVID-19. The funds can be used to cover rent, utilities or other expenses. There are no credit checks and you can repay the money, with no interest, over 24 months.
People on support payments, such as JobSeeker, might be eligible for a Centrelink Advance Payment which you repay out of future Centrelink payments. To check your eligibility, call Centrelink or visit an office, which have largely remained open during lockdowns.
For further information about any of the above payments, visit servicesaustralia.gov.au
3. Contact your bank, landlord, telco and energy providers
People are often scared to alert their lender or service providers that they are in financial trouble, but you should let them know as soon as possible if you anticipate having difficulty paying a bill. Ask to be put through to their ‘financial hardship team’ to discuss options for rescheduling payments.
By law, if you’re struggling, you have the right to request a ‘reasonable’ repayment arrangement.
4. Beware of taking on new debt
If you need to access finance, think carefully about your options. Instead of choosing high-interest loans or credit cards, mortgage holders can look at unlocking any excess repayments they have made on their home loan. People with existing credit-card balances can consider rolling over to a card that offers up to 36 months interest free. But be careful: these cards can revert to interest rates of 20 per cent plus. Also be careful using buy-now-pay-later providers. If you miss your repayments, fees and penalties can escalate.
5. Review large expenses like insurance
Insurance provides peace of mind against things going wrong, but it’s worth checking you have the appropriate level of cover. If cash flow is tight, you can look at reducing your premiums by exploring larger excesses (the amount you agree to pay out of pocket in the event of a claim) and considering if you need top-level cover for things like private health insurance, or by simply shopping around for a better deal. Websites like Canstar, RateCity, Finder and Compare the Market can be helpful.
6. Maximise your tax return
Make sure you maximise your refund, or minimise your tax bill, by claiming all your deductions. If you did any work from home last financial year, the Tax Office has a special 80 cents per hour deduction you can claim. You need to have kept a timesheet to substantiate your claim. Actors and production workers can claim specific expenses related to their work, including travel between jobs and if required to carry bulky materials for work. You can also claim the cost of maintaining a certain hairstyle, if required for a role. Google ‘Performing artists — income and work-related deductions — ATO’ to find a list of allowable claims.
7. Track your spending
A great way to begin tackling your fear of finances is to start tracking your spending — try for a period of one month at least. Akin to exposure therapy, writing down what you spend forces you to confront it. I have a range of free worksheets in the bio of my Instagram account @moneywithjess where you can also see how much fun I have tracking my own spending, with special colour-coded highlighters. Once you can see where your money is going, you can start to minimise, trim or cancel unnecessary expenses.
8. Set up future funds
It’s important to think ahead to any large and irregular expenses which could torpedo your budget. Things like car maintenance, annual insurance bills or unexpected medical costs can cause enormous stress if you fail to plan for them. Figure out the anticipated annual cost and then break it down into a smaller weekly or monthly amount to set aside. You can access my ‘Future Fund’ worksheet on my Instagram account.
9. Embrace the secondhand economy
It’s not just cars that depreciate in value the moment you sign on the dotted line. Household furniture, appliances, clothes and books all cost about a third, or less, if you buy them secondhand. Facebook Marketplace and Gumtree are great places for the cash-strapped to go shopping, while at Freecycle, as the name suggests, no money changes hands. You can also join Facebook ‘buy, swap, sell’ and ‘street bounty’ groups for your local area. It’s better for the environment, too.
10. Don’t panic about the future
Many creatives will have been forced to draw down on their super to get by. But don’t panic −.you don’t need $1 million to retire. Remember that only one-quarter of retirees today are entirely self-funded, and most people can expect to receive a full or part aged pension. For those looking to bolster their superannuation, there are ways to make tax-advantaged contributions once you are in a position to do so again.
Jessica Irvine is a senior economics writer for Nine Entertainment’s newspapers, including The Sydney Morning Herald and The Age. Her popular Sunday column and weekly email newsletter Money with Jess puts the ‘personal’ back into personal finance, sharing candid details of her own budgeting and investing journey in a bid to help readers engage with and understand their own finances. You can sign up to receive Money with Jess free at newsletters.smh.com.au/moneywithjess and follow her on Instagram @moneywithjess
