From Pilbara mine sites to St Georges Terrace executive offices to small businesses, very few West Australians have been sheltered from the fallout of the slowing WA economy.
Thousands of WA families now find themselves either with reduced incomes or without jobs at all and, according to those at the coalface of change, many are struggling to adapt to their new circumstances.
My Budget founder Tammy May says demand for the company’s services has jumped 30 per cent in WA as the population adjusts to life in a post-boom town.
“The majority of these are due to changes in circumstances which have left the client feeling financially stressed,” Ms May explains, adding that the worst thing to do when finances take a hit is to put your head in the sand and wait for things to blow over.
“Put together your budget plan, understand your financial position and make your decisions accordingly,” she says.
Life After Debt’s associate director Natalie Levett says many of the WA families now seeking help were, until recently, coping well financially.
“Many of the clients we are seeing were on high incomes, with a mortgage, as well as having extremely high credit-card debt,” Ms Levett explains.
She has seen many couples separate because of financial stress and many approach the company desperate for a solution to avoid losing the family home or personal bankruptcy.
First and foremost, she advises clients to contact creditors to explain the change in their situation and to try to negotiate new repayment arrangements.
“Creditors are far more likely to assist and offer solutions if you don’t avoid their calls,” she says. “This also gives you time to investigate other options, such as debt consolidation, refinancing or a debt compromise.”
Both experts say drawing up a budget is vital to readjusting financially and emotionally to any dramatic change in circumstances.
“Go through your day-to-day living expenses and take a look at what you are actually spending your money on. It is always surprising to see where people spend their money when they can least afford it,” Ms Levett says.
When the family breadwinner takes a hit, wives and partners can step up but Ms May cautions there is no one-size-fits-all solution.
While children are affected when household budgets tighten, Ms May says this canbe good for them.
“Use it as a way of teaching them about money and budgeting — get them involved, take them grocery shopping and get them to help you stick to the budget. It can be a great learning experience for them.”
While the setback may only be temporary, the experts say it should serve as a reminder to live within your means and to always have an emergency fund in place.
“Going through a tough time financially is not a failure,” Ms May says. “Everyone experiences rough patches in their lives. It’s how you deal with it that counts — and never be afraid to ask for help.”