Get on top of your finances post COVID-19

Money and Life
(Financial Planning Association of Australia)

As lockdown restrictions begin to ease Australia-wide, a new normal is emerging for businesses and employees. Here we explore the roadmap out of lockdown and what lies ahead for our finances.

While it’s too soon to say what the post-lockdown economy will bring, for many Australians life won’t be quite the same as it was before COVID-19.

Record job losses, reduced hours of work and the deferral of dividend payments by listed companies are all set to impact on household budgets in the coming months.

The jobless rate rose to 6.5% in April, which was actually better than many experts had feared. However, hours worked fell by 9.2%, the biggest monthly decline on record; and the underutilisation rate rose to a record 19.9%.[1]

Commsec chief economist Craig James says unemployment is expected to peak near 10 per cent. But there is some light at the end of the tunnel.

“Provided social distancing is maintained with good hand hygiene and significant COVID-19 testing, there is no reason that a ‘V-shaped’ economic recovery can’t occur as lockdown restrictions ease,” he says.

So what does the path out of lockdown look like? And how can you recover financially if your income has been affected?

Lifting of restrictions

The National Cabinet has agreed a three-step plan to gradually remove quarantine restrictions between now and July. The carefully staged approach involves winding back limits on the size of group gatherings, allowing certain businesses to reopen and permitting sports, recreation and travel to restart.

The first stage will allow group gatherings of up to 10 people; with some retail stores, restaurants and cafes allowed to reopen, provided strict social distancing measures are in place.

Office workers will be encouraged to continue working from home until at least stage three, and have been asked to avoid public transport at peak hour.

For details of what’s allowed at each stage, you can view the complete three-step framework on the Health Department website.

Each state or territory will move through the stages at their own pace, depending on their circumstances, so always consult your local state or territory health department website