How to cope financially with some of life's toughest events
Being faced with a very difficult and unexpected life event is something we all dread.
Unfortunately such events such as losing your job, separating from your partner, financial hardship, illness or losing someone are so completely devastating emotionally that it's hard to think about your finances during these times.
As much as you wish the world could just stop for a while and give you some time to adjust, it sadly doesn't work that way.
So if you are suddenly faced with any of these events, our heart aches for you and we hope the following information about getting your financial side of things back on track with be of some help and at least provide a starting point for you.
1. Losing your job
This is a hard financial situation to experience.
On top of looking after your health, you need to look at your financial situation straight away.
Sit down with your bank statements, bills etc and work on what expenses you will have over the coming months.
Now, do the following:
- Do up a budget /calendar plan so you know when loans/bills etc are due.
- Cut right back on spending where you can - do not reach for the credit card.
- Make sure you receive all your entitlements from your ex employer (check with a union) or if they went bust, see if you can claim with a Fair Entitlements Guarantee.
If you are going to struggle straight away making repayments, contact the Department of Human Services to find out about income assistance options.
It's also important to call your utility suppliers (electricity, gas, water, phone etc) and any loan providers you have as they also should have options for financial hardship they can talk to you about.
We understand this is a very hard situation to face, but the very best way to deal with it is straight away.
2. Separating from your partner
This situation is usually very complicated, especially if there are children involved and if the other partner was the main income earner.
Looking only at the financial side of it, here are 5 critical things you need to deal with:
- Make sure you have a bank account in your own name and close off joint accounts if possible.
- If you have a mortgage, let the bank know you've separated and cancel any redraw access if it has one
- Check all of the bills to see whose name they are in. If they are in yours, you are liable for them so if you can't afford them contact the provider straight away to discuss your options.
- If you rent, check whose name is on the lease. If it's only in yours, then you are also fully responsible for paying the rent.
- Contact the Department of Human Services if you're struggling financially to see what services and payments you may be eligible for.
There are many other important financial items you may need to do. A good place to start is to use the Governments' MoneySmart website which has a separation checklist you can work through.
3. Your debts are out of control
Many Aussies are faced with this situation. Remind yourself you are not alone and there is financial help available.
The most important thing you can do is get some financial help if you don't think you can resolve it yourself.
The Government provides free financial counselling through their National Debt Helpline on 1800 007 007 or you can go to their National Debt Helpline website for more information.
Remember, if you have a bill or debt that you can't pay, contact the lender or provider and let them know right away. They are very familiar with this situation, they will not judge you and will be able to offer you some alternatives to help you during this time.
4. You or a family member become ill
When illness or an accident happens, the last thing most Aussies think about is sorting out their finances and budget straight away.
Unfortunately this is what you need to try and do, and it can help you feel more secure and under control.
Whether it is you or your partner, also do the following as soon as possible:
- Confirm what sick leave entitlements you/they have.
- If you have any of the following insurances - contact them and ask what financial help you are entitled to;
- Health insurance
- Income protection
- Trauma cover
- Total and permanent disability insurance
- Contact the Department of Human Services to see what financial assistance you may be eligible for.
- If you are experiencing financial hardship, contact your bill and loan providers for assistance.
5. You lose your partner
In such an emotional time, the last thing you need is to try and think about finances.
Sadly, you will need to deal with a lot of financial decisions and expenses.
Here is a list covering your immediate financial concerns when you've lost your partner:
Arranging their funeral - this can often cost thousands in Australia
If you can't afford it, check with your partner's bank to see if they can release some money from your partners account. Also check to see if your partner had organised any funeral cover or had any insurances that can help with funeral expenses. You could also consider a loan if you need the funds quickly. If you plan to pay the loan out quickly once you receive a payout from an insurer, make sure the loan has no early repayment fees.
Notify their bank and providers of any bills or loans in their name
If this is too hard for you, ask a family member or close friend to help you.
Understand what's going to happen from now
The Government has a website page which explains what to do following a death which provides both financial and emotional support during this very hard time.
Being confronted with any major upset in life is something no-one can predict or find easy to deal with. Financially there are many hurdles to face and they will be hard, but we hope you can see how important it is to address them as soon as possible so you can financially recover as quickly as you can.