COVID-19:

Reduced Income Guide

The Covid-19 crisis is an adverse event of immense proportions that will change our lives forever. We could be dealing with the fallout from this event for years to come and for a lot of people, that will mean living with some kind of reduced income through redundancy or reduced hours.

Experiencing an unexpected drop in income can be an incredibly stressful event for you and your family. While we can all hope that the worst economic effects of Covid-19 aren’t permanent, it is also important to take sensible steps towards lessening the financial impact on you. This may include things like:

• Making a revised budget

• Working with your creditor/s to manage your debt repayments

• Checking your entitlements from both your employer and the Government

• Finding ways to cut back on everyday expenses

• Doing a thorough price comparison of your service providers to make sure you’re not paying more than you need to be

Other Government Support

• Unite Against Covid-19

• Ministry of Health

• Work & Income

• Ministry of Social Development

• Inland Revenue

• Office of Ethnic Communities

Non Government Information and Support

• Paerangi.nz

• Manaaki.io

• Employer & Manufacturers Association

• Depression.org.nz

• Mental Health Organisation

• Moneytalks

• Restructuring, Insolvency & Turnaround Association

• Moneyhub.co.nz

Make sure you’re getting what you’re entitled to

Check out our guide for employees if you need more information on your employer’s obligations under the Government’s Wage Subsidy scheme.

If you’re struggling with everyday costs, you may be eligible for additional assistance from the Government. Check the Work and Income website for details.

Cut back on costs

If your income has reduced due to the Covid-19 crisis, find areas in your budget where you can save money.

Here are a few examples:

• Cancel subscription services like Netflix or Spotify

• Cook at home instead of going out. Bulk buy and freeze food where possible

• Consider growing some of your own fruit and veg

• Buy generic brand multi-packs of things like toothbrushes, toilet paper, soap etc

• Use generic brand multi-purpose cleaning products or make your own using things like vinegar, baking soda and lemon

• Save money on electricity by turning off appliances at night and phone chargers etc when not in use

• Make the most of free activities like parks and bush walks

• Minimise the amount of driving you do to cut back on petrol costs. If you have two cars, consider whether or not you can manage with one. Not only will you get the lump sum of cash when you sell, you’ll save significantly over the course of the year on fuel, maintenance costs and insurance.

Other cost-saving ideas

Shop around to make sure you’re getting the best deal on your insurance

Note that we are by no means saying cancel your insurance policy to save money!

It may have been awhile, years even, since you reviewed your insurance policy and checked the market to make sure you’re getting the best deal. Even with no claims bonuses, there might be a provider out there who offers the same plan at a lower premium.

Even if you decide not to switch providers, double check all of the details of your current plan to make sure you’re not paying for anything you don’t need. For example, if you no longer have anyone aged under 25 driving your vehicle, that could result in a decrease to your premiums.

You could save up to 15% a year by paying your premium annually instead of monthly.

Do a price comparison on your utility providers

Are you getting the best value for money from your power, gas, and telecommunications providers?

Head over to What’s My Number to compare power and gas providers. It’s a free service that will give you an annual estimate for different energy providers based on your address and household (number of people, if anyone’s at home during the day, how you heat your home etc). It takes into account various offers and promotions as well so you may find it beneficial to switch regularly and take advantage of these deals.

Lots of broadband providers offer discounts for the first 3-, 6-, or 12-months, take a look at what’s available at your address.

Are you on the right phone plan?

Consider switching to prepay mobile plan to save yourself some money. On-account monthly plans can get costly and you may not be using the full extent of the minutes, texts and data included anyway.

If you’re with one of the ‘big three’ networks (Spark, Vodafone, or 2Degrees) there’s a good chance you could be saving money by switching to a smaller provider (i.e. Warehouse Mobile or Skinny).