Practitioners - Managing Financial Obligations

Last Updated: 22 March 2020

Managing your financial obligations 

The banks have announced measures to help Australians manage their home loan repayments. Every personal situation differs, and each bank will have their own set of rules and actions. We advise that you contact your mortgage broker or financial institution to find out what options you may have when it comes to managing your loans. If you are self-employed, you may have also have additional loans such as a motor vehicle loan or equipment loan. Options may include the following: 

  • Switching your home/investment loan to an “interest only” facility 
  • If you have a variable loan, switching your facility to a fixed loan with a lower interest rate 

  • Deferring loan repayments if necessary.  


Depending on your situation, you may also evaluate the following options: 

  • Using the equity in your home or investment property to draw out additional funds, which can used as an emergency cash buffer. 

  • Re-financing your loans across to another bank offering better terms 

  • Obtaining a personal loan for emergency purposes. 

You may also be in a situation where you are renting your place of residence. The government have announced that the different states and territories will provide rental assistance to those in hardship cases. No further information has been provided and will update our members when we know more. 
 

Managing your ongoing budget 

The current situation will require all individuals to have a firm grasp on their personal spending and savings. If you haven’t already, work out exactly where your money is going, and create a budget that takes into account your basic needs, and anything that is discretionary.  

The Moneysmart website provides a simple budget planner you can find at https://moneysmart.gov.au/budgeting/budget-planner 

There are also a variety of more sophisticated budget programs you find online which automatically link to your bank accounts and track/categorise your spending. Examples are: 

  • Moneysoft 

  • MoneyBrilliant 

  • Pocketbook 

  • YNAB 

Once you have identified your spending and expenses in detail, determine what can be postponed (i.e. gym membership, wine club, etc.) and what you can indefinitely live without. Identify areas where you feel you could potentially save more money (electricity rates, private health insurance, etc). Ultimately compromises may be necessary, and this may mean a change in your lifestyle so that you can make ends meet. 

Managing tax 

If you are self-employed we recommend you speak to your accountant and determine whether you can defer some of your tax obligations, and what strategies are available to you. Depending on your situation, you may also be eligible for certain government subsidies for small businesses. Again speak to your accountant to find out which benefits may apply to you as a self-employed operator. 

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