When faced with challenging times, making big financial decisions or simply managing everyday finances can feel daunting.
Getting a clear understanding on how much you really spend and on what, can help you determine the steps to take in the short term to prioritise making important repayments.
1. Get started with your income
To get a full picture of how much money comes in and out of your account, start by making a list of your current income. This should include any regular money you receive - your wage, pension, and any government assistance or income from investments.
2. List all your expenses...big and small
Make a list of all your expenses, you may be surprised how unconscious, small or impulse buys add up! This process can sometimes be overwhelming so start with big bills like car registration, electricity and any loans. Then look at your everyday expenses. Try keeping track of everything you spend over a week or longer so that you can see exactly where your money is going. Alternatively, budgeting apps or online templates like this budget planner from The Government’s MoneySmart website can make it easier to capture and track all your expenses.
3. Put your expenses in buckets
Once you have a record of all your expenses, split them into buckets like home and utilities, groceries, public transport, and eating out. Look at your list and work out which of these expenses are essential and why. These important expenses are usually your priority buckets or payments – the payments you need to make regularly.
4. Does it all add up?
Does your income cover all your expenses? If not, then ask yourself - which of your non-essential expenses can you potentially pause or reduce? Keep going through the list until you find that you can better manage your expenses while also setting yourself up to move forward. This list of savings tips from MoneySmart may also give you some ideas to make a big difference to your budget with a few small changes.
5. Get help when you need it
If you have given your expenses a spring clean and still having difficulty managing loan repayments, you can reach out to your lender to see what support options there are available. There could be more than you expect. Get in touch early, understand your options now and make sure there are no unexpected surprises down the track, including any impact to your credit score.
6. Understanding your credit score
Your credit score is a summary of your financial history that lenders use to help decide if they will loan you money. It can be impacted by a range of factors including numerous credit enquiries in a short time frame, late repayments and defaults on loans or bankruptcy. If you access financial assistance on your loan with a payment break due to COVID-19 and you were up-to-date with repayments before assistance, it will not show as missed payments on your credit report. To find out more about what could impacts a credit score, read our guide on credit scores here or head to CreditSmart.
Tools to give you control
Simply putting this information together can help you feel more in control, even when there’s so much uncertainty in life. There are tools, tips and services out there to assist you right now. If you would like to find out more, MoneySmart and CreditSmart have plenty more useful budgeting and financial resources.
Financial support options from Pepper Money
If you are a Pepper Money customer and experiencing financial difficulty, please call us sooner rather than later. Contact us on 1300 650 931, or visit our Financial Assistance Hub to understand the options that may be available to you.
If you’re considering a repayment break, we’ve prepared a Fact Sheet to help you understand the process and some important things to know about loan repayment holidays. This includes a Repayment Deferral Calculator, so you can calculate the impacts of deferring your home loan repayments.
Don't forget to check out our other articles in Pepper’s Real Life Money Management Guide, for some simple tips to manage your money and seek assistance in need:
All applications are subject to Pepper's normal credit assessment and loan suitability criteria. Terms, conditions, fees and charges apply.
This article provides you with factual information only, and is not intended to imply any recommendation about any financial product(s) or constitute tax advice. If you require financial or tax advice you should consult a licensed financial or tax adviser. Neither Pepper nor its related bodies, nor their directors, employees or agents accept any responsibility for loss or liability which may arise from accessing or reliance on any of the information contained in this article. For information about whether a Pepper loan may be suitable for you, call Pepper on 13 73 77 or speak to an accredited Pepper Money broker.