COVID-19 Crisis Money Plan (Pandemic Money Tips)

By August 24, 2020 3 Comments

What a year has it been so far!. COVID-19 is like nothing we’ve experienced before or a lot of us thought we would. The health impact is devastating.

On the other side of things, the economic challenges are growing by the minute. Unemployment is increasing and making financial decisions right now can be quite stressful.

I’m in Melbourne and we’re back in Stage 4 lockdown. It’s been all over the news that we’ve been having a bit of a run with the virus, trying to contain it again and all that brings with it. I’ve been quiet on the Money Messenger for the last few months since all this started. Honestly, it got to me a bit. My day business (financial planning) which was impacted and my husband lost his job 2 months ago and quite frankly, being in and out of lockdown in this once vibrant city of Melbourne has been driving everyone nuts. It’s becoming quite tiring and stressful and I don’t think we’ve all been ourselves of late, so I was quiet and focused on my business didn’t make many new videos.

Here is a COVID-19 Crisis Money Plan and steps to take depending on whether you’ve lost your job, been stood down, or are still employed but just not sure what your financial future holds.


Contact Centrelink

If you’ve lost your job, meaning you’ve been terminated from work and are no longer part of your employer’s company, contact Centerlink straight away. There’s no need to personally go to a Centrelink office, instead, click on the MyGov website ( and apply for a Centrelink Reference Number (CRN) and lodge your application for JobSeeker payment; the dole (unemployment benefits). It’s not a lot of money, but it’s a safety net to get you through these tough times and put some essentials on your table for dinner and pay some bills.

If you have been stood down temporarily but still employed by your company, then speak to your employer about receiving the JobKeeper payment. This is done through your employer, you don’t need to apply yourself your employer will apply for you through the ATO.

If you still have work and your income hasn’t changed, then that is a great position to be in. Consider though, what if it changes next week? What if it changes in 4 weeks? You never know what’s around the corner, especially now, so take this opportunity to be grateful for what you still have, but also, to pretend for a minute that you don’t have it and make some changes now so that you can take advantage of your situation and make the most of it. Scale back your expenses just in case, because we don’t know how long the virus is going to be around and we don’t know what the total economic impact will be, so, while some situations haven’t changed, in terms of income and employment, consider that they might in the future.



Identify What Must Be Paid

Whether you are new to budgeting or you have an existing budget, get a pen and some paper and make a list of everything you must pay. Go through your recent expenses and as new bills come in, write them down. Rent, utilities (water, electricity, gas etc), food, insurances, debt repayment, write them all down. Know where you are financially. Just because the world is in crisis and there are a lot of people out of work doesn’t mean that your creditors will not want their money. It doesn’t mean anything has changed in terms of your financial commitments. When it comes to paying debts and expenses nothing has changed, those companies still want their money and you must pay. You have to identify those commitments before you can make any changes.

Minimise Your Expenses

This may sound boring or restrictive but these are troubling times. There are two aspects when it comes to money, incomings, and outgoings. This is the same for everybody universally and every business as well. Maybe you can’t change the income side right now as we have very extenuating circumstances that are affecting normal income-earning abilities but what you can 100% control is your expenses (your outgoings).

If you are no longer employed, consider yourself in crisis mode! If you have no funds (or minimal funds) coming in, then you only have a certain amount that can go out before you will find yourself in strife. Some people, unfortunately, already are experiencing that and need to work through it, whereas other people are new to unemployment and finding their way since recently stopping work. We all need to take the reins and pull back on spending for a while.

So take your list of the expenses you identified and split them into two categories; essential and non-essential. Let’s be frank, essential expenses are those that must be paid or else you will go to jail or starve! Non-essential expenses are the ‘nice to have’, the ones we like to have but not essential; that includes Netflix.

Essential expenses include rent/mortgage, other debt repayments, food, utilities (gas water electricity), some insurance etc. Minimise those as much as you can. That means pulling back on groceries or buying cheaper food brands, or cutting down on electricity or water or whatever you have to do, however, that category may be harder to reduce because they’re the ones that you need to spend. Also, there are a lot of us right now stuck inside and cooking from home so you may actually find that your grocery bill has gone up, however, expenses in the other category, the non-essential expenses, would have reduced any way as we’re not going out right now (or as much), so entertainment expenses, beauty services and overall ‘fun money’ will have reduced a lot and will allow for extra groceries right now if needed.

Dear old Netflix…look it’s $20 a month. Is it going to make much of a difference to your overall budget to keep it going? Possibly not, however, if you have no income then YES that could be the make or break amount for you! If you’ve got luxuries in your life whether it be Stan, Netflix, or any other subscriptions, take a look at those and if you need to cancel them for a while, then do so. If you have multiple subscriptions then rein it back to just one. We’re all trying to keep ourselves sane right now during COVID-19 lockdowns and restrictions, but there are alternatives – books/community libraries can be free, games can be free, and a lot of people have unlimited home internet with infinite access to everything and anything online, but if you must… have one streaming service, keep one and get rid of the others.

Whatever you need to do, just recognise that this is a time of crisis so that means changing what we know and what we’ve been lucky to experience in Australia to date, which is pretty much a luxury lifestyle for a lot of people. I don’t mean luxuries in like mansions on the waterfront but luxuries in life such as these extras that we often forget they are, in fact, luxuries.

Reduce Debt Repayment

You must make minimum repayments on all of your debts. You cannot stop repaying your loans because you’re in financial strife, however, if you are currently making any extra repayments on loans, then you can choose to reduce that to the minimum to preserve more of your cash flow. Especially if you’re receiving JobKeeper or JobSeeker payments, then right now is not the time to be necessarily getting ahead in your finances and repaying debt faster if it causes a strain on your cash flow. If in crisis mode, then once you have reduced all other non-essential expenses, focus on reducing debt repayment to the minimum whilst going through this unprecedented time.

Speak to your lender for more information and to decide what’s right for you.



Earn a Side Income

Put your self-employed hat on for a moment. Consider if you can offer services online. If you come from an administration kind of industry, or anything to do with editing, writing, or publishing, or anything else for that matter that can be done online, can you offer your services via an outsourcing site such as or and earn a side income? Or, can you put together education videos, or sell something online? Any artwork you do and can sell? Think outside the box. This may not be a quick financial fix but it’s just something to think about for the future because it adds another layer of income in addition to employment. Diversifying your income is another level of financial protection.

Plus, consider networking. In times like this, it can be challenging to find new work. With people searching for work it will be quite competitive. Employers may not necessarily be expanding and looking for many new employees right now, so, consider networking. That means updating your profile on and contacting people in your industry to offer your services and ask about job opportunities. Who do your contacts know? Try to get your foot in the door and stand out from the crowd.

What else can you consider?

Mortgage Freeze

There are a few extra financial options around at the moment in terms of cutting down expenses such as a mortgage freeze. Offered by some lenders, it essentially means putting your current mortgage repayments on hold. However, a major problem is that interest costs are not being put on freeze, so those that take up this option may end up extending the overall time it will take to repay the loan because interest will still be charged and added to the balance! Not making repayments is great for cash flow in the short term, but you will end up paying more for the privilege over the long term.

It would have been more beneficial if banks offered an interest freeze for a while as well, however, banks like to make money as we all know! Consider a mortgage freeze only if you are in absolute crisis mode! Perhaps if you had significant money coming through the door before and now you’ve had a dramatic reduction to your income compared to your Centrelink payments. Perhaps then a mortgage freeze may be suitable, however, just know that your interest costs will still accrue and compound to the loan; this month’s interest will be added to the loan and then next month’s interest will be charged on the higher loan balance and added to the loan and so on and so further. That will keep snowballing and compounding over time and it will take longer to repay. Before considering a mortgage freeze, if you can instead afford to make minimum repayments, then keep doing that as a first choice. That will be better than freezing your repayments. Talk to your lender for more information.

Early Access to Super

The government is allowing some people to access superannuation (super) early. A withdrawal of up to $10,000 could have been made in June and up to $10,000 again in July. That’s now been extended until September. You need to be receiving some sort of Centrelink benefits to qualify or meet the other terms and conditions. Not everyone can access their super early but the idea was for people in need, in absolute crisis mode, to access a lump sum out from their super early to keep up to date with mortgage repayments/rent and keep afloat with living costs whilst also putting money back into the economy to stimulate things.

However, there are some big problems with accessing super early. A lot of people will take up this offer simply to access more money than they’ve had for a while, so they can have cash in the bank, whether they need it or not, and ignoring the long-term consequences. Accessing $10,000 or $20,000 from super now means having a lot less money for retirement because at retirement at age 67 (many years away for some people), that relatively small about money would have compounded and those people could miss out on around $100,000! Worse yet, when COVID-19 started earlier in 2020, we had a stock market downturn of around 30%. It’s come back somewhat but it’s still a dramatic drop from where we were at the beginning of the year so if you take out money from super now, you’re essentially selling units in your super fund (selling shares) during a very depressed market. That means that the $10,000 withdrawal, used to be worth around $13,000 (30% more). Essentially, losing $3,000 just to access $10,000. When would you ever sell shares during a low market at any other time? Crazy!

Making short-term decisions now could dramatically affect long-term financial outcomes.

Instead of accessing super early, make other changes first.

Talk to your lender and reduce repayments to the minimum. Whilst you are there, ask for an interest rate reduction as well! That can be a great way of getting your costs down.

If you’re worried about your utilities and how you’re going to pay contact your phone provider, your internet provider etc, and speak to them. If you can’t afford some bills right now, companies will often put you on a payment plan so that you can make that easier for your cash flow.

Follow the COVID-19 Crisis Money Plan to give yourself some breathing room.

We’re all in this together and we will come out the other side of it but we need to make sure that we can get through the journey!

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Disclaimer: This information provided is general in nature. It is based on the knowledge and experiences of the author and not intended to be taken as financial advice. It does not take into account the objectives, financial situation or needs of you or any other particular person. You need to consider your financial situation and needs before making any decisions based on the information. You may have to modify the information and do further research, for it to suit your personal financial situation. Therefore, before acting on the information, it is recommended that you consider its appropriateness to your circumstances or consult a financial adviser, tax advisers or legal professional to assist you in doing this


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