Sydney-based Sai Natarajan was recently made redundant from his IT consultancy job due to COVID-19 lockdown in Australia.
With two grown-up kids and a wife who had a casual job, it was a stressful time for Mr Natarajan.
“But I sailed through those tough times thanks to the financial literacy I gained earlier this year,” he tells SBS Hindi.
- Close to 600,000 Australians lost their jobs due to COVID-19
- The unemployment rate went up to 6.2 per cent- from 5.2 per cent in March
- 2.7 million people were affected by either job loss or had their hours reduced
Mr Natarajan made important changes to his financial arrangements in February this year.
“I took a mastering money course by Skilled Smart where I essentially learnt about how to structure my finances and how to set aside savings before I start spending money every month,” he told SBS Hindi.
“I finally cultivated the habit and learnt the method to handle my money.
“I started by creating an emergency fund and streamlined my finances which include my superannuation, my insurance. I managed to save over $10,000 extra which gave me peace of mind when I lost my job,” Mr Natarajan says.
“If I had lost my job 6 months ago, I would have been so stressed, and I may even have had to borrow money. But after the changes I made to my finances, I wasn’t that emotional when I lost my job because I feel a lot more financially secure and relaxed.
“I know I have a cash buffer, I know my finances are streamlined, I know how to save money.”
Close to 600,000 Australians lost their jobs between March and April due to the impact of COVID-19.
The Australian Bureau of Statistics (ABS) estimates that a combined group of 2.7 million people were affected by either job loss or having their hours reduced.
The unemployment rate went up to 6.2 per cent- from 5.2 per cent in March.
The crisis is far from over and finance and economics professionals think that the worst is yet to come.
Australian property analyst and commentator, Martin North, told SBS Hindi, “We are at a critical economic and market turning point and its essential to be prepared. Whilst we may see the stock markets continue higher for a bit, the weight of higher unemployment and loan defaults, plus unlimited central bank money printing will impact the real economy negatively. At some point, the markets will have to adjust, and gravity will win.”
With unemployment on the rise and many businesses shut down, what started as a health crisis has spiralled into an economic crisis, with millions feeling the financial crunch.
But one can still secure their finances, says Paridhi Jain, CEO & Founder of financial education company SkilledSmart.
She says that there has never been a more urgent time to become financially skilled and educated.
“The best time to fix your finances was one year ago. The second-best time is right now. Things could remain bumpy for a while yet, so you want to get ahead and be as prepared as you can,” she says.
“Now is a time to really be rethinking your finances. Review your discretionary expenses and subscription payments, and think about what you can delete, defer or down-grade.
“Also start prioritising your emergency fund. Too many Australians do not have adequate cash reserves to fall back on in hard times.
“Lastly, start getting financially educated. In every recession, there are losses but there are also opportunities for gains.”
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Disclaimer: We’d like to point out that the information contained in this segment is general and is not specific advice. If you would like accurate information relevant to your situation, you should consult a registered financial planner.