New research from comparison site Mozo has found that 80% of Australians are worried about the financial impacts of Coronavirus, with one in five particularly vulnerable, having no savings as a safety net if they found themselves unable to work. Simply put, many Australians cannot afford to ‘not’ work.
Nearly half of Australians (47%) said they were unable to work remotely due to the nature of their job, leaving them particularly vulnerable if Coronavirus was to escalate further and stricter quarantine measures were imposed. 30% of the population said they were not eligible for sick leave if they were to fall ill. One in four would said they would be personally and financially affected if daycares or aged care facilities were to shut down
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“Mozo research has found that Coronavirus is driving a lot of economic worry right now, more so than rate cuts, the bushfires, a depressed retail sector and dropping unemployment. There are portions of Australians who are very vulnerable financially – those who have casual contracts, are unable to work remotely, aren’t eligible for sick leave, have dependents, or don’t have a savings fund,” says Kirsty Lamont, Mozo Director.
“We’re certainly in the thick of uncertain times and worry is a natural response, but remember there are ways to build reserves and avoid going into the red. You need to review your spending, categorise your purchases and look for unnecessary purchases or automatic deductions. This can help you separate the essentials from needless spending. Set a goal, make a budget and then stick to it. Funnel your savings into the most competitive account – the sharpest savings rate currently on the market is 2.00% compared to a market average 0.90%.”
“Mozo research found that only one in four property owners have refinanced, so now is the perfect time to make the move with savings of up to $100k possible by opting for a competitive online lender compared to the big four banks. From the moment you pick up the phone to signing on the dotted line the average amount of time it takes to refinance is five days, meaning that you could pocket $21K a day in savings.”
When asked about their spending habits, 71% of Australians said they would adjust their lifestyle in the wake of Coronavirus, with 39% vowing to spend less money on clothing and leisure, 33% increasing savings, 30% curbing international travel, 20% stopping domestic travel and one in ten taking money out of shares as well as moving money into term deposits.
One in four Australians admitted they had no savings and would be vulnerable if unable to work. 30% said they had a small amount of savings but said they couldn’t afford to be out of work for long while 23% said they were financially prepared but unable to afford being out of work long term.
Mozo’s tips for workshopping your finances
- Research high interest savings accounts online and opt for one of the sharpest providers on the market
- Set up a direct debit to transfer money from your everyday transaction account to your savings account as soon as you’ve been paid.
- Set your goal – knowing how much money you’re striving to save can make progress all the sweeter as you edge towards that amount
- Withdraw cash rather than using a card – this way it’s much harder to spend over a set amount
- Track your spending – many banks now offer apps that track your spending, enabling you to identify unnecessary purchases and watch your savings grow
- Consider refinancing – you could save up to $106k by opting for the most competitive lender on the market compared to the big four
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