Finances in the pandemic: Aussies spend less and worry more about debt

young-couple-on-laptop-reviewing-spending-and-debt

Quick facts: 

  • 65% of workers are concerned about job security 
  • 1 in 10 say they are steps away from homelessness 
  • 1 in 5 no longer spend on alcohol 
  • Over half have farewelled eating out at restaurants
  • 78% of Aussies with debt are worried about how to repay it  

Financial worries are a part of everyday life 

As the financial impact of the COVID-19 pandemic continues to hit Aussie families, many people remain concerned about what the future will bring.

In fact, fresh Mozo research shows that 49% of Australians spend at least an hour worrying about their financial well being each day. Currently, 4 out of 5 people are feeling some level of concern about their finances, while 65% are uncertain about their future employment. 

“Covid-19 has presented a lot of financial uncertainty with unemployment hitting 7.4% in June and predictions it will reach 9.25% by December,” says Kirsty Lamont, Mozo Director. “While saving is a priority, for many Australians there isn’t quite enough to come and go on - half the population is considering a new line of credit at this time, while one in ten admitted they were using buy now pay later platforms to get by.”

“Concerningly, financial vulnerability is incredibly high right now with 48% saying that meeting financial obligations will be touch and go. 1 in 10 Australians reported that they felt like they are a few steps away from homelessness. With so many people feeling a high degree of financial stress, purse strings are being tightened and non-essential spending has taken a sharp dive.”

Spending low as concern about debt is high 

With financial concerns fresh in Aussies’ minds, many have had to cut back on non-essential spending. 

As of July, over 50% have claimed they no longer eat out at restaurants or head to the cinemas. Plus, 1 in 5 have stopped buying alcohol and 34% have cancelled their gym memberships.

covid-19-spending-in-australia

However, budgeting is still a sore spot for some Aussies. Mozo research found that 29% of people have no budget at all, or just a rough idea of their financial situation. 

“To get your finances in better shape, look at your incomings and outgoings to gain an understanding of where money is going, and where you might be overspending,” says Lamont.

“Check your bank statements for long forgotten automatic payments that are no longer relevant, and think about the last time you reviewed necessary outgoing payments like car insurance, mortgage repayments and energy bills - switching to the most competitive offer could save you thousands every year.”

On top of that, the latest stats also show that a whopping 78% of Aussies with debt are concerned about how to repay it.  

“If clearing debt is a priority, there are ways to dig yourself out of a negative bank balance. A 0% balance transfer card can be a great way to consolidate and pay off your debt while saving on interest,” Lamont says.  

“Sit down and calculate what you owe and how much you can afford to repay week on week. The key is to pay down your balance before the 0% period ends and higher interest rates kick in.”

Ways to stay financially savvy during a pandemic 

In time like these, it can be tough to save money. But that’s why it’s important to do what you can to keep more of your cash in your pocket.  

So, here are some handy tips on how to get financially fit: 

  • Categorise spending: Try to split up your purchases into household, food, transport, entertainment, personal and savings. This way you can clearly see what your weekly budget is and identify areas you can cut back.   
  • Prioritise saving: No matter how large or small the savings is, set yourself a weekly, fortnightly or monthly goal. Any cash you save pop it straight into a high-interest savings account to be rewarded for your efforts.  
  • Put aside spending money: When setting up your budget give yourself some wriggle room to spend every now and again. Put a certain amount of money aside to spend on whatever you want - just don’t go over or dip into your savings!  
  • Review your credit card: Weigh up whether your credit card is helping you financially, or if it is just leaving you drowning in interest repayments. Opt to spend on your debit card instead, and a balance transfer may be a good way to clear the debt you have.  

Are you hanging onto some credit card debt you want to get rid of? Check out below or jump over to the balance transfer credit card comparison table for more options.

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    Great Southern Bank Low Rate Credit Card

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    0% p.a. for 25 months and then 21.74% p.a.
    11.99% p.a.
    $49 $0 in the first year
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  • Apply By 10 October 2021
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    humm90 Mastercard

    With up to 110 days interest free on your spending, this card is pretty unique in the market, and great for managing your daily spend. Plus, no foreign transaction fees overseas or online.

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    23.99% p.a.
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  • Apply By 31 October 2021
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    Bendigo Bank Low Rate Credit Card

    0% p.a. on purchases for up to 12 months (Reverts to 11.99% p.a). Also 0% balance transfer for up to 12 months. Low annual fee of $45 and no fees for additional cardholders.

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    0% p.a. for 12 months and then 11.99% p.a. (2.00% balance transfer fee)
    0% p.a. for 12 months then 11.99% p.a.
    $45
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    Westpac Low Rate

    Enjoy a super low rate of 13.74% with 55 days interest free plus 0% balance transfer for up to 28 months at 1% BT fee. No annual card fee for the first year, $59 thereafter. New Cards only. Offer ends November 30th 2021. T&C's and exclusions apply.

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    $59 $0 in the first year
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    Great Southern Bank Platinum Credit Card

    0% p.a. balance transfer for 25 months, $0 annual fee for the first year and also receive 1 rewards point for every dollar spent. Purchase protection insurance. Mozo Experts Choice Balance Transfer Platinum Credit Card Winner 2020^.

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    $149 $0 in the first year
    Great Southen Bank Platinum Rewards
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    NAB Low Rate Card

    0% p.a. interest on balance transfers for the first 32 months, plus a low ongoing purchase rate after that means you can spend with confidence. There's also up to 55 interest free days on purchases to help you manage your budget better.

    Balance transfer rate
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    Estimated savings
    0% p.a. for 32 months and then 21.74% p.a. (0% balance transfer fee)
    12.99% p.a.
    $59 $0 in the first year
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    Details