Financial advisor’s emergency budgeting guide

Is it possible to live on $550-750 a week? A recognised financial advisor has the answers, and has crunched the numbers to offer a budgeting guide for the millions of Aussies who will be required to survive on JobSeeker and JobKeeper payments. Millions of Australians will be paid $750 a week after more than 850,000 businesses to date have registered for the JobKeeper scheme.[1] In addition, more than 587,600 people who have so far registered for JobSeeker payments will receive a $550 a week from Centrelink. JobSeeker payments will begin to flow on 27 April and JobKeeper in the first week of May.  

 

Helen Baker is a licensed financial advisor and spokesperson at Money.com.au – a financial information platform offering tools such as budgeting spreadsheets, pay calculators and savings calculators to help Australians.

 

She says: “To create a budget that will be useful for most, we have had to make certain assumptions.

 

“An income of $750 will be extremely difficult to get by on and is not sustainable over the long term, which is why the first step for JobSeeker and JobKeeper recipients will be to make arrangements with their banks, landlords, insurers and utility providers to defer or reduce payments. They should also seek bulk-billing medical services where possible. This emergency budgeting guide assumes that rent has been reduced, mortgage repayments have been deferred (you should seek advice if that is appropriate for you) and other financial commitments have been delayed for six months (you should also seek advice if that is appropriate for you).

 

“Those who use this guide will also need to almost eliminate non-essential spending. The budget caters for a healthy, single person without large ongoing expenses, or in need of ongoing medical support. We want to show Aussies how they can live off these funds and best manage their finances until they can get back to earning their normal income.

 

Helen says JobSeeker and JobKeeper recipients can make tweaks to the budget to tailor it to their individual circumstances. “Once you have your budget outlined, use it to negotiate with your financial services providers and/or landlord to negotiate payment reductions or deferral options until the crisis is over. The budget will clearly show your bank or landlord not only that the amount of money coming in will be less than the amount going out, but by how much you will need to reduce your payments.”

 

Budget guide for JobSeeker recipient

 

Expense	Budget for JobSeeker recipients ($550 per week)
Rent	$200/week
Electricity	$150/quarter ($12/week)
Internet and mobile phone	$105/month ($25/week)
Supermarket items and produce	$150/week
Cosmetics and toiletries	$7/week
Hairdresser	$0/quarter
Car (includes petrol, parking and tolls)	$50-65/week
Public transport	$40/week
Streaming subscriptions	$24/month ($6/week)
Alcohol	$30/week
Eating out	$10/week

 

Budget guide for JobKeeper recipients

 

Expense	Budget for JobKeeper recipients ($750 per week)
Rent	$350/week
Electricity	$200/quarter ($15/week)
Internet and mobile phone	$105/month ($25/week)
Supermarket items and produce	$150/week
Cosmetics and toiletries	$7/week
Hairdresser	$75/quarter ($7/week)
Car (includes petrol, parking and tolls)	$50-65/week
Public transport	$50/week
Streaming subscriptions	$24/month ($6/week)
Alcohol	$30/week
Eating out	$20/week

 

A detailed breakdown of each expense category in each budget can be found here: money.com.au/emergency-budgeting-guide 

 

Helen reveals an example of how Aussies can survive on $550 or $750 per week:

 

1. Rent/mortgage: reduce payment to $200-350 a week. If you are on $750 per week, to make ends meet, ensure your rent doesn’t exceed $350 per week. Those on $550 per week should negotiate a rent reduction to $200. Helen says: “Speak to your landlord about decreasing your rent and build a case for yourself. If you’ve been a good tenant, this puts you in a better position. If you’re a tradesperson, see if you can offer up your services around the property, in exchange for lower rent. Your landlord might also find they’re better off decreasing your rent for the next few months and have the stability of someone paying, rather than risk finding a new tenant and having a potentially vacant property for an indefinite time.” Helen says if mortgage repayments are over the above amounts, you should seek advice about whether deferring or reducing is the right option for you and understand the consequences. 

 

2. Electricity: $150-200 per quarter. If you’re on JobSeeker, aim to get your energy bill down to $150 per quarter (you’ll allocate $12 per week). If you’re on JobKeeper, negotiate it down to $200 per quarter ($15 per week). Many energy providers offer pay-on-time discounts, so pay attention to when you need to pay your bill before to take advantage of this. Helen recommends Aussies do their research to see what energy assistant schemes are available in their State. “For example, residents in NSW could be eligible for a one-time payment through the Energy Accounts Payments Assistance (EAPA) scheme, where they could receive at least one $50 EAPA electronic voucher. These vouchers are sent to the energy provider and credited to the individual’s account.[2]”

 

3. Internet and mobile phone: up to $25 per week. Individuals who pay internet and mobile in a ‘bundle’ should look to pay no more than $25 a week ($105 per month) combined - or $13 and $12 a week ($55 and $50 monthly) for each, if they are billed separately. Helen says: “If you’re paying your internet plan and mobile phone bill separately, find out whether you can combine these into a package. You may be able to get a discount for being loyal to your provider and having multiple products with them. For instance, if you’re a Vodafone customer, you could save up to 20 per cent off your plan when you bundle various items under one account.[3]”

 

4. Supermarket items and fresh produce: $150 limit per week. This budget allocation should be adhered to by those earning either $550 or $750 per week, and covers items such as fruit, vegetables, milk, bread, toilet paper, vitamins and cleaning products. Helen recommends that people always cook at home when living off this emergency budget, and get takeaway once a month at most (see last point). “It’s always cheaper to buy groceries and make it stretch across multiple meals, even if the cheapest pre-packed meal costs you $8. Three meals a day at $8 each, seven days a week, will see this total $168 – which puts you $18 over the $150 budget, without money to spare on other household items.” While this grocery budget may vary slightly from person to person, Helen says it can be tweaked accordingly. “If you’re a big eater and need to spend a little extra on food, review your other expenses to see where you can cut costs to put towards extra groceries.”

 

5. Cosmetics and toiletries: $7 weekly limit. Individuals living on either budget should allocate a maximum of $7 a week. While this might not be enough to cover the purchase of an item, consider saving the weekly amount until the end of the month, so you’ll have a total of $28 to spend. You may also swap cosmetics with friends where the colour didn’t suit. Remember that there’s room to move here, so long as you reduce other areas of your expenses to compensate.

 

6. Hairdresser: $0-75 a quarter. Unfortunately for those on $550 a week, there won’t be enough budget to get roots touched up or a cut at a salon for the next six months. However, an at-home colouring kit could be incorporated into the cosmetics and toiletries budget. Individuals living off a $750 weekly income can allocate $75 a quarter to their hair. Helen says: “You won’t have the luxury to go for a regular blow out, cut or colour, but those getting $750 a week in Government benefits could consider getting their hair cut one quarter, then their colour in the next. The upside to the situation is that we’re all socially distancing and staying at home, so there are few photo ops and social outings to get done-up for.”

 

7. Car: $50-65 per week on petrol, parking and tolls. Motorists on each budget can spend a maximum of $25-30 in petrol and around $20-30 in road tolls and parking per week. If you no longer need to drive and can have your car sitting at home, the $200 a month you save could be put towards other expenses. Helen advises that during this time, any car maintenance be delayed if possible, if you’re on JobSeeker, until you’re back on your feet. “You’re likely to be using your car a whole lot less, so consider whether you can push any car services out for three-to-six months. For those living off $750 a week, I’ve allocated $125 a quarter to cover these costs. It should also include your registration if it is due; however there are third-party layby services which allow you to pay for your car registration in installments.”

 

8. Public transport: budget $40-50 a week. Aussies living off $550 a week are advised to stick to the lower end of this budget, while those earning $750 a week can spend the extra $10. While this budget may not be possible if people were working their regular full-time hours and commuting to work, a reduction in hours may mean people aren’t travelling as much for work. If people are working from home and don’t need to commute, that’s $40-50 a week that can be put in your back pocket.

 

9. Streaming subscriptions or pay TV: $24 maximum a month. It’s not necessary to have a subscription to every streaming platform, so unless you can fit multiple subscriptions within your $6 weekly budget ($24 per month), Helen recommends people cancel the other platforms and only using one at a time. “Once you’ve watched everything you want to on one subscription, cancel it then sign up to the next one. Most platforms also offer a free trial, or you may be able to find a promo code online, so find ways to cut back on these expenses to leave additional funds for other areas.”

 

10. Alcohol: $30 weekly budget. Helen knows that it’s unrealistic for many to forego the occasional glass of wine, particularly during this time, so she has allocated a $30 budget per week for individuals on both earnings to spend on alcohol. “It’s a reasonable budget to spend each week and could get you two bottles of wine a week or a case of beer to last a fortnight. There’s always plenty of deals on alcohol as well so Aussies should look out for these.”

 

11. Eating out: $10-20 towards takeout or coffees. While eating out usually includes spending at restaurants, buying takeaway, lunches and tea or coffee, it might be easier to stick to over the next couple of months while Government-mandated shutdowns see cafes and restaurants remain closed for dining in. Helen says: “Everyone wants a little luxury, so if you’re living off a $550 weekly payment, you can spend your $10 budget on two-to-three coffees a week or a takeaway lunch. Those on $750 a week have an additional $10 allocated, which could be used on one restaurant-bought dinner each month.”

 

Helen continues: “Remember this isn’t meant to be forever. It’s just about keeping your head above water for now.”

Full budgeting guides for those living on JobSeeker and JobKeeper payments can be found here: money.com.au/emergency-budgeting-guide