7 ways to save on expenses when facing unemployment

With the unemployment rate soaring due to Covid-19 and a recession looming, many worry about the long term prospects of keeping their jobs. However, there are measures you can put in place to prepare yourself for the possibility of losing your job and your family’s financial security.

During this crisis many have learned what is essential for day to day living and what they can do without. They have already fallen into the habit of living without many unnecessary expenses. Therefore, this is a good time to see how you can continue on this path and build up your savings so they will last longer.

Essentially, it is crucial to analyse your expenses to determine what is a necessity and what is purely a want.

Here are some ideas to cuts expenses:

  1. Eliminate those high interest credit card balances

If you have no choice and you must use them, make sure to pay your credit card off every month to avoid any charges. Consider applying for a 0% interest credit card. You can roll your debt over without paying any interest, but be sure to pay it off before the interest free period expires. InfoChoice compares over 71 balance transfer credit cards and over 154 low rate credit cards.

  1. Consider refinancing your mortgage

Rates are at a record low at the moment and your monthly repayments could be reduced significantly. You could also look into increasing the life of your loan. If you have a 20 year loan, your repayments will be lower if your home loan is stretched over a 30 year period. Each mortgage company has its own rates and closing costs so shop around before you commit to one particular lender.

  1. Can you reduce your car and home insurance? 

If you shop around you may find better rates that will allow you to make payments at a lower monthly repayment rate. You could also consider raising your deductibles to lower your monthly premium.

  1. Put holidays on hold! 

You could potentially save thousands by postponing that much desired holiday. Opt for smaller getaways that are local so you can save on travel time and cost. With Australia’s borders about to open, now may be the best time you ever have to explore Australia and support the economy while you are doing it. 

  1. Sign up for automatic debt repayment plans

All it takes is one late day on your repayments and you can be hit with interest charges and in some cases late fees. You will be surprised how quickly these add up. You could save yourself hundreds of dollars per year by having payments set to direct debit

  1. Unplug all unused electrical devices

Most electronic devices constantly draw a small amount of electricity. These can add up quickly, particularly when you consider just how many devices are in your home. Simply unplug any items you don’t regularly use.

  1. Downgrade your health insurance

Re-assess what you need to be covered for. If you are a 60-year-old female, do you really need obstetrics care? You will be surprised how many items you are covered for that may not be applicable to you. With the removal of these services, you could save a great deal on your health insurance.

This update is not financial advice. This article is general news and information.

Home Loans: The comparison rates are based on a secured loan amount of $150,000 and a term of 25 years.

Personal Loans: The comparison rates in this table are based on a loan of $30,000 and a term of 5 years unless otherwise indicated in the product name with^, in which case, the comparison rate is based on a loan of $10,000 and a term of 3 years. The comparison rates are for unsecured personal loans only for the relevant amounts and terms. The comparison rates for car loans and secured personal loans are for secured loans unless indicated otherwise.

WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. Comparison rates are not calculated for revolving credit products.

The products compared in this article are chosen from a range of offers available to us and are not representative of all the products available in the market and influenced by a range of factors including interest rates, product costs and commercial and sponsorship arrangements

InfoChoice compares financial products from 145 banks, credit unions and other financial institutions in Australia. InfoChoice does not compare every product in the market. Some institutions may have a commercial partnership with InfoChoice. Rates are provided by partners and taken from financial institutions websites. We believe all information to be accurate on the date published. InfoChoice strives to update and keep information as accurate as possible.

The information contained on this web site is general in nature and does not take into account your personal situation. Do not interpret the listing order as an endorsement or recommendation from us. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. If you or someone you know is in financial stress, contact the National Debt Helpline on 1800 007 007.

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