It’s official. We have the statistics. With reduced hours and pay, since mid-March 2020, wage levels in Australia
have dropped by 6.2%.
For many households, this represents a significant cut in spendable income.
Take control of the situation
There’s no doubt this can be a worrying time, especially if you have concerns about paying your bills or making your savings last. You might even be anxious about slipping into debt. When you consider your expenditure, it’s hard to think of ways it can be reduced.
However, the potential for savings has always been there. You just need to know where to find it.
There are plenty of budget and savings apps
out there but the first place to start is with the basics. From understanding your spending to making strategic cutbacks, we take a look at how to budget if you’ve taken a pay cut.
Managing your finances
Money problems are very stressful, and you might initially be tempted to ignore them. This would be a mistake because the sooner you get to grips with your financial situation, the sooner you can put plans in place to deal with it. The first thing you need to do is get your budget down in writing.
This is a great opportunity to work on those job-friendly spreadsheet skills. Starting with your expenses, try to be as accurate as you can. Checking the numbers on your last three monthly bank statements will help with this.
Once you understand your expenses, you need to balance these against your new income. This is where the crunch point comes. If you’re spending more than you earn, you need to make some changes.
If your work situation has changed, you might find some of your expenses have too. For example, if you are working shorter hours or more from home, your travel expenses will probably have reduced. Understanding where your spending has already reduced will help you see how you can make further improvements.
We have a few ideas below:
- Can you shop more economically and cook more meals from scratch?
- Can you change your transport mode to walking, running or cycling for some journeys?
- Can you reduce your energy bills by turning appliances off and comparing rates
- Can you reduce costs, especially data costs, on your mobile and home WiFi plans?
Making your spending decisions count
Learning how to balance a new budget isn’t just about juggling the numbers. It will also help if you change the way you think about your expenditure, especially when it comes to one-off purchases. It’s easier to control your spending decisions when you understand what your current priorities are.
By filtering all of your spending through these priorities, you can make sure what money you do have goes in the right place.
For example, spending on holidays, meals out and other treats might not make sense right now. However, investing in a new computer to help you work from home
, a new bike to help you save money on transport, or an online training course
to enhance your employability potential, might pay off in the future.
Enhancing your income
Making cutbacks isn’t the only way to make ends meet. You might also be able to find ways to boost your income. Selling things you don’t need is a great starting point. This is also a great opportunity to use those creative thinking skills and develop a valuable side hustle.
We have a few suggestions to get you started below:
Take action now for a secure future
Whatever your new job situation is, it's really important not to panic.
By keeping calm and taking an objective view of your budget, you’ll be able to make the right decisions now for a happier future. Whether you decide to make spending cutbacks, find ways to increase your income, or do a bit of both, your future is in your hands.
Upskilled offers online courses
across a wide range of industries. Whether you’re changing careers or looking for a side hustle to keep you going through the lean months, get in touch today and find out more about how we can help.