How to manage your finances after retirement
Amy Vu, Reprise Digital
While most of people retire because of reaching their retirement age or being eligible for superannuation, there’s quite a number of people retire because of retrenchment, dismissal or unavailability of work, based on the Retirement Intentions research by ABS. In addition, there’s high proportion of Australian aged 65 and above renting or continuing to pay off a mortgage. So, what does that mean? Even though you do not have a job anymore, you still have bills and unfortunately, they are not going to pay themselves. So, when this happens it is important to make sure you act fast to shore up your finances.
We’ve taken a look at some basic money management tips for anyone who’s found themselves out of work. Acting quickly and planning at this stage means you will be better prepared to cope with any financial strain caused by the situation, so you can find yourself back on your feet sooner rather than later.
Shed unnecessary expenses
Unfortunately, not having a steady stream of income means you might have to start looking at some of your regular luxury items as unnecessary expenses rather than a part of your weekly routine. This could mean sacrificing some of your weekly expenses including expensive gym memberships, pay television subscriptions, magazine subscriptions, and fees for sporting clubs you may be a member of. While this part of managing your expenses when you are out of work can be a little bit painful, it’s important to remember that this is only a temporary measure rather than a permanent change.
For example, if you have a magazine subscription that costs $16.95 per month for a monthly publication, you could be saving $203.40 per year.
Access financial support
There is no shame into looking for support from the government. It’s important to note, however, that some benefits have screening processes and waiting periods, so it’s important to contact the Department of Human Services as soon as possible. The Department of Human Services also offers financial advice, social support workers and a range of different programs designed to help you get back on your feet as soon as possible.
A lot of people delay their move to access financial support out of the perceived stigma these payments have, but if you’re in need of support you shouldn’t hesitate in doing what you can to access these payments.
Talk to your lenders
If you have got any kind of loan that has repayments which may be compromised by your lack of work, then you are really not doing yourself any favours by keeping it a secret from your lenders. Make sure you are honest about your financial situation with the people you owe money to. They will respect the fact that you went out of your way to advise them of the situation, rather than having them find out about you being out of work the hard way (from you failing to make a repayment).
It is unlikely they’re going to waive your repayments, but there’s the chance that with a bit of honesty and planning you can work out an alternately structured payment plan to suit your new needs.
Talk to your family and friends
Finding yourself out of work can be difficult to process, particularly if you have a family to provide for. By the same token though, they have a right to know if you are not going to be bringing in as much money as you used to be. It is your responsibility to make sure they are aware of your new financial situation, and what you are going to do to get out of it. While the news may be hard to deliver, communication is the key and you will often find that your family and friends will be supportive and can even help you when you are looking for options.
So, while this talk might be a tough one to have, you owe it to your friends and family to be as honest with them as possible.
Be organised with your bills and payments
The last thing you need in this financial situation is a late fine, so make sure you are organised with your bills and payments. Even something as simple as marking a calendar for upcoming bills and setting some money aside can make a huge difference when you are in a situation where every penny counts.
Organising and keeping track of every little payment you have to make may seem tedious at times, but it’s an important budgeting tool and will help you understand when you’re approaching choke points in terms of your finances and how long you will be able to last in this period of financial flux.
The Department of Human Services has also set up a useful service called Centrepay. Essentially, Centrepay is a direct bill-paying service offered to people who are already receiving Centrelink payments. The Department of Human Services will take a small sum out of your Centrelink payment each fortnight to cover your bills, which can make things a lot less stressful when you’re budgeting and figuring out how much money you have for the next period of time.
This is a handy way of making each dollar stretch that little bit further and ensuring your money is managed in the most effective manner when you are between jobs.
Finding yourself out of employment is hard enough without having to worry about your financial commitments, but it is important to remember that it is just a temporary situation. By planning effectively and making sure your money is managed in a responsible way, you can make sure you’re in a good position to meet all your financial commitments and cut down on a lot of the stress and strain that comes with being without a form of employment. If you manage to do this, you are going to find yourself back on your feet in no time at all.