Economy “improving”, but 1 in 4 still panicked about paying bills

Posted: 29 December 2020 4:01 pm
News
mother despair

New research shows that economists have high hopes for our improving economy, but everyday Aussies are still feeling the massive financial pinch.

Our own Finder study of 1,004 respondents revealed that 16% of Australians are somewhat worried right now about making their mortgage or rent payment, while a further 9% are extremely worried.

That's 25% of Australians who are fretting about how they'll find the funds to pay their rent or mortgage after Christmas – at a time when banks and economists are increasingly optimistic about our "improving" economy.

Commonwealth Bank's chief economist Stephen Halmarick said the economic and market outlook for Australia in 2021 is looking more positive, with global growth forecasts at 5.2 per cent led by the US and China.

"Australia has done a better job than just about any other nation in controlling the spread of the virus," Halmarick said.

"This, combined with fiscal and monetary policy support being provided to the economy, and the role played by the Australian banking system, means the economic impact of COVID-19 has been less severe in Australia than many other nations, and less severe than initially expected."

While this all sounds positive in theory, the stark reality for many Australians is far more grim.

Halmarick admits that "the human toll of the sharp rise in the unemployment rate has been very real". But even though the financial impact of COVID-19 has been less severe than originally predicted, it has still left many millions of Australians in financial stress.

People are worried, and I don't blame them!

When JobKeeper ends in March and people face the prospect of a lasting drop in income – what happens then?

The events of recent weeks have shown that we're not out of the woods when it comes to severe lockdowns. We've seen state and territory borders slammed closed and many pockets of Sydney locked down, which is having a real and significant impact on businesses, big and small.

The fallout in tourism dollars between New South Wales, Queensland and Victoria alone is measured in the hundreds of millions of dollars.

Our business community is haemorrhaging profits during what should be their busiest time of year, and staff are not earning an income.

Until we have a COVID-19 vaccine in place, we will continue to experience these kinds of massive economic disruption. So how can economists be so positive about the state of our financial health when there remains so much uncertainty and upheaval?

Our economic outlook may be improving, but people are still hurting financially, so now more than ever, it's crucial that you run through your finances with a forensic eye for detail to make sure you're not wasting a cent.

An easy way to get started is with our Finder app: it's free, quick to download and allows you to effortlessly manage your money in the palm of your hand. You can track your spending, see your credit score, get unique savings insights and see all your accounts in one place.

If you have a home loan, compare rates now to make sure you're not paying too much interest. If you have a credit card, consider consolidating to a zero-interest balance transfer so you can pay off the debt and kick off 2021 on the right foot. If you have some money to invest, do some research to make sure you're getting the best possible return.

We have no idea what 2021 has in store for us – but whatever your situation, now is the time to take action and make sure your money is working as hard as possible for you.

Download the Finder app now and see how you can save money on your home loan, energy, broadband, mobile phone, health insurance and credit cards.

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