NEWSFLASH! In September I will join The Conversation as its Business and Economy Editor. I have been honoured to work at The Age for the past ten years, originally alongside the legendry Tim Colebatch, and for the past four years as economics editor in my own right.

At The Conversation, my job will be to make the best thinking from Australia's 40 univerisites accessible to the widest possible audience. That means you. From the new year I will also write a weekly column.

On this site are most of the important things I have written for Fairfax and the ABC over the past few decades. I recommend the Search function. The site is a record for you, as well as me.

I'll continue to post great things from The Conversation and other places here, and also on Twitter and Facebook. Enjoy.

Monday, April 11, 2011

Don't borrow, don't save, don't spend. Advice for the stretched.

How do you cope if you suddenly don’t have enough money to get by? The best advice from 48 Australians who know is not to borrow, not to save, and not to spend - even if that means avoiding coffee shops and friends.

“If I am in town I bring my lunch and my thermos,” says ‘Anna,’ an aged pensioner in a survey released today by the Brotherhood of St Laurence.

“I just don’t go out, you don’t put yourself in a position where you know you’ll be in trouble,” says Luke, an apprentice living away from home.

The survey finds Australians on the edge are very good at separating needs from wants, even where that means enduring abuse and abandoning activities that give them support.

“These could be as simple as a coffee with a friend or a night out with mates. In some cases, people were coping with stressful situations and even with abuses because they believed that under their financial circumstances they did not have other options,” says the report, Money matters in times of change.

Almost all those interviewed shied away from borrowing. Some destroyed their credit cards, others used them reluctantly...

‘Michael’ faced the loss of his car unless he handed over more than he had been quoted to repair his car. “I had to put that on the credit card, like 900 bucks,” he says.

Although saving would help build financial resilience many found the government’s rules forced them not to. ‘Claire,’ a 20-year old Melbourne mother of two won’t save because the Centrelink liquid assets test might cut off her benefit. Her partner saves and she uses all of her income to pay bills.

Working is also regarded as risky. ‘Jo,’ a single mother worked extra hours to try to buy a fridge. When she told Centrelink of her extra income in a periodical report she ended up with no extra money and lived without a fridge for one year.

The report finds many of the coping mechanisms forced on vulnerable Australians by sudden loss of income and Centrelink rules increase vulnerablity rather than build defences against it. It recommends changes in the rules to reward encourage rather than discourage saving and work.

A second report to be released at a Brotherhood of St Laurence conference on financial risk in Melbourne today finds that face-to-face rather than computer or phone interaction is the best way to give advice to stressed Australians.

Published in today's SMH and Age

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