The Hard Word
Prolonged high interest rates will leave many Australian households battling mortgage stress this festive season. Don’t leave it too late to ask for help.
Forget about “sorry” being the hardest word to say. It’s actually “help” that borrowers have trouble with.
Research conducted earlier this year found three in 10 Australians said they would never approach their lender for help when going through financial hardship, with around 40 per cent saying they would sell their belongings or get a second job rather than admit they were struggling to meet repayments.
The main reasons given were fears hardship arrangements could cost more in the long run, may negatively impact their credit scores (they don’t), or wouldn’t make much difference.
Worse still, more than half of people surveyed didn’t even know they could apply for special hardship terms, from temporary repayment reductions to loan restructures.
The findings shocked lending regulator the Australian Securities and Investments Commission (ASIC) – which conducted the research – prompting it to launch an awareness campaign in June urging borrowers to both ask for more and expect more from their lenders.
The Just Ask!1 campaign aims to educate consumers and puts lenders on notice as higher interest rates and cost-of-living pressures tip more Aussies into mortgage stress.
1 Just ask your lender for help - Moneysmart.gov.au
According to Roy Morgan research, around 1.66 million households – about 29.5 per cent of mortgage holders around the country – were at risk of mortgage stress as of September. That’s a rise of about 850,000 households since the RBA first began hiking rates in May 2022.
In response to this growing cohort of homeowners on the edge, ASIC has taken a keen interest in how lenders treat borrowers who run into financial difficulty. The recent awareness campaign comes hot on the heels of the May report Hardship, hard to get help: Lenders fall short in financial hardship support2 – that, as the name suggests, rapped some home lenders on the knuckles for making the hardship process overly complex.
So, for homeowners struggling with mortgage payments, now is the right time to put your hand up for help. Not only are the lenders listening, the regulator is watching. Like a hawk.
ASIC has firmly thrown its weight behind consumers, with ASIC commissioner Alan Kirkland saying: “The message for Australians experiencing financial stress is that banks or lenders have a responsibility to support customers. If you are worried about being able to make your repayments, you’re entitled to ask your bank or lender for help.”
2 24-104MR ASIC report: Australians need better hardship support from their lenders | ASIC
Raise your financial awareness
Before going to your lender, it is worth considering other ways to reduce your debt burden. There’s sound advice available at creditsmart.org.au, which aims to arm borrowers with knowledge. Many cases of financial hardship have their roots in poor consumer education, so it pays to upskill when it comes to money management. Some CreditSmart advice includes:
• Be judicious with Buy Now Pay Later (BNPL) purchases. They are a form of credit that lenders will factor in to calculate your borrowing capacity. BNPL repayments are automatically deducted from credit or savings accounts and leave a visible ‘footprint’.
• Pay your bills on time. Late payments and defaults can negatively impact your credit score and paying a debt does not erase the default from your credit record.
• If you are in a position to make additional repayments, focus on debts attracting the highest interest rates such as a credit card with a 20 per cent interest rate versus a car loan with an 8 per cent rate.
To help work out where your cash is going and identify where savings could be made, the Government’s MoneySmart website also has a free budget template3
How to Just Ask for help
It’s better to seek help than miss payments.
Under Australian credit law, borrowers in financial hardship have a legal right to ask their lender to vary repayments, while the lender has an obligation to respond to this request within a specified timeframe and be reasonable in negotiating any new arrangements. Just be aware that lenders are required to assess your eligibility for hardship assistance, but depending on your circumstances it may not be in your long-term interest for them to grant it.
The first step is to contact your lender’s hardship team, if possible, via email so there is a record of communication. The sooner you get in touch, the better.
According to ASIC data, the top five reasons borrowers claim hardship are over-commitment, reduced income, medical, unemployment and separation.
3 Budget planner - Moneysmart.gov.au
Although some lenders are streamlining the process for first-time applicants, borrowers may be asked to provide documents to:
• Support the hardship claim.
• Outline household income and expenses.
• Suggest a suitable payment arrangement.
If a lender does not believe a borrower meets the criteria for hardship support and refuses to negotiate new or temporary terms, they must explain why.
A new Banking Code of Practice due to take effect early next year explicitly states for the first time that circumstances considered to contribute to financial hardship include illness or injury, loss of employment, pandemic or natural disaster.
Importantly, according to Moneysmart, entering a financial hardship arrangement with your lender will not affect your credit score. While your credit report will note you have an arrangement in place, this listing is deleted after 12 months.
Other hardship help
If contacting a lender directly is too daunting, borrowers have the option to access a free, confidential and independent financial counsellor through the Government’s National Debt Helpline4. Financial counsellors can act as intermediaries to negotiate hardship agreements with lenders. Beyond this, they can also review your finances and help plan a budget to help get you back on track.
It’s also useful to know it’s not just lenders that offer help to Aussies who find themselves in a fix. Most State and Territory Governments also offer energy or water grants to help cover utility bills when residents get caught out by a sudden change in circumstances. For example, WA’s warm and fuzzy sounding HUGS (Hardship Utility Grant Scheme) offers up to $1,060 to help pay utility bills, while Queensland’s Home Energy Emergency Assistance scheme can cover up to $720 of electricity or gas bills.
If you’re facing mortgage stress, remember that you don’t have to handle it alone. There are systems in place designed to help you, and now more than ever, it’s essential to take advantage of them. Asking for help isn’t a sign of failure – it’s a smart financial move that can keep you afloat during challenging times.
Please note, we do not provide tax, legal or accounting advice. This article has been written for general informational purposes only and is not intended to provide, and should not be relied on, for tax, legal or accounting advice. We encourage you to consult your own tax, legal and accounting advisors before engaging in any transaction.
4 Find a Financial Counsellor - National Debt Helpline (ndh.org.au)
Bluey’s Night Before Christmas
Who doesn’t love a bit of Bluey? This gorgeous new book would make a perfect gift under the tree for a special kid in your life!
“ ‘Twas the night before Chrissie, when inside their home, not a Heeler was stirring, not even a gnome.” It’s Christmas Eve and Bluey and Bingo are tucked snugly in their beds when they hear a noise outside. Who could it be? Join six-year-old blue heeler pup Bluey and her family – from the hit ABC Kids TV series – in a magical Christmas Eve adventure based on a classic festive tale.
Penguin RRP: $16.99
With gift-giving season upon us, it’s got us thinking about presents we’ve received. Some particularly memorable, simply because they didn’t hit the mark. We’re looking for tales of the funniest, most bizarre or cringe-worthy gift you have ever received. If you’ve been on the receiving end of a gift that you think will make us grin, tell us about it for the chance to win $1,000. If you have a photo of said gift – even better! How: in 350 words or fewer, send your answer to: havencompetitions@afgonline.com.au placing ‘Gift competition’ in the subject line. Include: your name, address, email, phone number and the name of your mortgage broker.
Dates: opens on November 15 and closes on 12 January.
Winner: will be decided on January 15 and notified by telephone after this time.
Terms and conditions: visit http://bit.ly/HavenWin
Clean Freaks
Why do we love watching something we hate doing?
Who would have thought watching a bloke called Nathan whipper-snipper an overgrown Sydney yard could rack up more than 125 million views on social media?
Clearly, none of us or we would have done it ourselves. Instead, it’s Nathan Stafford of Nathan’s Lawns and Gardens who has become an international sensation and poster-boy for society’s collective obsession with tidy-up videos. From decluttering to pressure washing, and mowing to sanding, the rise of cleaning reels is surely one of the strangest trends of the 21st century.
TikTok has even created a dedicated CleanTok channel dedicated entirely to the genre, with more than 150 billion collective views, more even than the wildly popular BeautyTok.
The irony, of course, is that while we’re glued to our screens, we’re chewing up valuable time that we could have spent actually tidying our homes or gardens. So, what gives with our obsession and how can we do a bit more of it IRL?
Cleaning videos have been growing in popularity for years, but they really went ballistic during Covid, which is a clue to what is driving the trend. It’s pretty much the antidote to doom-scrolling.
According to researchers, cleaning videos help induce a sense of calm when people are feeling overwhelmed. Watching time-lapse footage of someone bringing order to chaos can actually function as a mini therapy session, reducing levels of stress and anxiety. While that is positive in itself, being drawn to cleaning videos may be an indication you would benefit from bringing more order and a sense of control to your life and surroundings.
If you need motivation to switch your focus from viewing to doing, here are some big benefits that cleaning brings:
• Your brain works better in a tidy space. A 2017 study published in Current Psychology found a significant link between clutter and procrastination. The visual stimulation caused by clutter (along with the reminder of jobs not done) can lead to cognitive overload that reduces working memory and ability to focus. So, decluttering your work space can boost your productivity. People with tidier homes have also been found to have lower levels of the stress hormone cortisol.
• Cleaning can reduce stress and anxiety. Quite apart from the sense of calm a clean, well-organised space brings, the physical act of cleaning is also a good stress buster. Researchers have found time spent doing tasks such as washing dishes or vacuuming can provide important moments of mindfulness. Cleaning can also help restore a sense of control when people feel overwhelmed by factors beyond their control.
• Cleanliness is next to healthiness. There’s a surprising amount of research linking good physical health to a tidy home. An Indiana University study found a correlation between greater physical fitness and cleaner homes, although there’s a chicken-or-egg debate about which influences the other. However, another study – that assigned participants to either orderly or disorderly rooms then offered them chocolate or fruit to eat – found people were less likely to reach for an unhealthy snack in an uncluttered environment.
Now you know all this, there’s no time like the present to put it into practice, clearing out the garden and decluttering the house to make way for Christmas entertaining. The hardest part is making a start, so here’s a few tips:
1. Start small: The downside to time-lapse cleaning and gardening videos is that they create a false impression of what is achievable. Hours of work are reduced to a 90-second clip because, well, who would watch four hours of gardening in real time? Set yourself small achievable goals: one junk drawer or cabinet, rather than a whole room.
2. Time not task: If you’re finding it difficult to start a job, it’s probably too daunting. Allocate your effort by time rather than task so it won’t overwhelm you. Thirty minutes is reasonable, and you’ll start to see results.
3. Don’t tidy and organise at the same time: They are different jobs. If you’re decluttering and organising, focus on just that. Cleaning is a separate task, and it is easier to do in a decluttered space.
4. Perfection is the enemy of completion: Your home is not content, so don’t compete with online images. Life is too short to colour-code bookshelves.
5. Start early and keep your eye on the prize: Most people find morning is the best time to tackle difficult tasks so getting up and at ‘em is a good plan. Keep in mind the scientific benefits of cleaning and imagine how great it will feel to put your feet up in a clean and calm space.
Pre-Chrissie op shopping
Did you know that the term “op shop” was invented in 1920’s Australia by Melbourne showgirl, Lady Millie Tallis? Millie wanted to give second-hand shops a more dignified name, so coined the term opportunity shop. In true Aussie style, this was soon shortened to op shop.
‘Tis the season for giving – and a great way to spread holiday cheer is by donating good quality, gently used toys, books and other items to charity shops ahead of Christmas.
Op shop volunteers urge people to donate early this year, saying there is rarely donated stock in good condition available just before Christmas, when cash-strapped parents are searching for gifts. But the same shops typically get a flurry of donations post-Christmas, as households make way for the latest influx of Christmas presents.
Donating toys can also teach your kids valuable lessons in kindness and generosity. Get them involved in choosing which toys to donate, knowing they are helping to make another child’s Christmas more special.
Tips:
• Ensure donations are in good condition and of good quality. When considering what to donate, use this test: only select items that you would be happy to give to a friend.
• Take the time to make sure toys and book covers are clean – use a wipe or cloth with mild dishwashing detergent to remove any grime.
• Before the drop off, check that your op shop of choice takes the items you’re donating. Not all stock toys or books for example. And resist the urge to leave them outside an unattended shop or next to an overflowing charity bin – if the collection is rummaged through, it will likely be discarded due to contamination.
• If you do have toys that are broken or incomplete, place them in a Toys for Joy collection bin, found outside Big W stores. Toys for Joy picks out good quality toys which are then sold in Salvation Army stores. But any that aren’t in good nick will be recycled if possible – old plush toys can be converted to a soil enhancer and metal toys may be recycled into new metal products.
Congratulations to Crystel for winning $1000 for her Haven Win entry. We went in search of your most embarrassing moment, and while we had some rippers, this one took the (Christmas) cake!
Here’s the story of how I, a regular mum of six, farmer’s wife, and owner of an OT business, ended up accidentally stealing a car.
My car was in for a service, so I borrowed my mum’s car for the day. After taking my daughter to her guitar lesson, we came out, hopped into mum’s car, and drove off. Unbeknownst to me, I had just stolen a car!
The owner of the car had a habit of leaving it unlocked with the keys inside. And in my defence, it was parked two spaces away from where I left mum’s car. So, when I got in, pressed the start button, and drove off, it didn’t cross my mind that it wasn’t mum’s. I continued about my day driving around our small town: running errands, chatting with friends, and eventually headed home to tackle some paperwork.
An hour later, mum called, sounding puzzled. “Are you at a café in town?” she asked. “No, I’m at home,” I replied. “Well, that’s strange because I’m at a café, and I’m pretty sure my car is parked out front.”
We disagreed back and forth, with me convinced she was losing it. I even yelled out to my kids, “Is grandma’s car in the driveway?” They confirmed it was.
Fast forward five hours, when mum arrived at my place so we could go pick up my car from the mechanics. She took one look at the car in my driveway, her jaw dropped, and she said, “Darling…that is not my car!” Which left me making an embarrassing call to the police trying to explain how I had managed to accidentally steal a car.
Sleighing Christmas
Don’t let the cost-of-living Grinch ruin your fun
If, like many people this year, you’ve found yourself stretched thin with essentials like food and electricity, fear not. Haven is here to save Christmas with 10 budget-conscious ideas that don’t require months of planning and, importantly, won’t make you look like a Scrooge.
1 Decorate on a dime: Buying Christmas lights, trees, baubles and tinsel at a charity shop is not only good for your budget, it’s environmentally friendly. So, you earn the right to feel a little smug while you’re decking the halls with second-hand holly. If you haven’t browsed a second-hand shop in November, you’ll be astounded at the range of decorations and Christmas-themed crockery and clothing on offer.
2 Only buy one present: Buying gifts for extended family and friends is a major stressor at Christmas. It saps not only your savings, but precious time that should be spent with loved ones, rather than scouring shopping centres.
Why not take the pressure off by turning gift-giving into a game? Sure, you could do a traditional Secret Santa, but Stealing Secret Santa is so much more fun. Even young children love the cheeky twist of stealing other people’s presents.
The rules are simple – let everyone know in advance that they are required to bring only one gift to Christmas gatherings and set a budget, say $30. Everyone draws a number from a hat that denotes the order of choosing gifts. Person #1 picks a gift and unwraps it. Person #2 then decides whether to steal the unwrapped gift, or chose a new one to open, and so it goes down the line.
If someone has their present stolen, they get to choose a new one. There is an obvious advantage in going last, so perhaps engineer for the youngest children to be at the tail end of proceedings. The joy of this method is it turns the process of unwrapping a single gift into an extended social game.
3 Play tourist at home: Search online for tips on places to visit in your hometown. It’s surprising how many tourist attractions locals have never checked out either where you live or in the surrounding region.
4 Organise a house swap: Take accommodation costs out of the holiday. They say a change is as good as a holiday, so why not try stepping into someone else’s shoes? You can do this informally, through friend networks (you’d be surprised how many regional dwellers would love a weekend in the city and vice versa). Or you could join the growing number of online groups such as Home Exchange or Aussie House Swap.
An alternate way to offset costs is to list your home as a shortterm rental on Airbnb while you’re away. The website bnbcalc. com can help check local council restrictions.
5 Bring a plate: If you’re hosting Christmas lunch for the hordes, make it easy on yourself and allow everyone to contribute by bringing a salad or dessert. Lean in to the fact people don’t want to turn up empty-handed and would rather spend time with you than watch you dashing around the kitchen.
6 Create a new tradition: Many of us have family traditions passed on from previous generations, but why not start some new ones? Here’s a few cheap and cheerful ideas:
• If you live near the beach or water, why not start the day with a morning swim? It’s a nice way to take the focus off presents and put it on spending time together.
• Decorate the tree and sit down to a special meal on December 1. It gets everyone in the spirit of the season and is a tradition that can be maintained when you don’t get to spend Christmas Day at home.
• If you’re struggling to contain early risers on Christmas morning, set up an escape-room puzzle they need to solve to get out of their bedrooms! Everyone’s a winner. There are plenty of DIY escape room plans online, or major stores sell affordable kits designed to be set up at home.
• Hide a pickle ornament. Yes, pickle ornaments are a thing. This weirdly wonderful tradition – thought to have GermanAmerican roots – involves hiding a distinctive ornament on your tree (or around the house to make it harder) on Christmas Day. Whoever finds the pickle gets endowed with good luck, or an extra present.
• Plan a Christmas lights tour. Even the big kids can’t help but enjoy themselves.
7 Go handmade: Giving friends a handmade present is about gifting your time, and that in itself is precious. But if you’re recoiling in horror at the thought of crocheted coat hangers, there are plenty of more modern DIY ideas that should be well-received. Aim for useful rather than decorative with things such as:
• Herbal and fruit teas: Buy some ready-to-fill tea bags, then load them with blended leaf teas, herbs, spices and dehydrated fruits. There are plenty of great recipes online to get you started stuffing tea bags like a pro.
• Christmas snacks and cocktail garnishes: An edible gift never goes astray in December. Think sweet treats such as rocky road, white Christmas, rum balls or tamari almonds and fresh nut mixes. Take it up a notch by dehydrating fruit such as blood oranges, lemons, limes and raspberries in the oven to package up as the perfect yuletide drink garnishes.
• Spice rubs and curry mixes: It’s all about simple entertaining at Christmas and gifting someone a homemade barbecue rub or freshly roasted curry-spice mix should be well received. It’s also a gift you can make in bulk, but be sure to include ingredient and instructions tags. Again, look online for plenty of recipe ideas.
• Stovetop potpourri: This is a bit of a niche idea, but any olfactory friends – and those used to Christmas in the chilly Northern Hemisphere – will appreciate it. There are recipes online, but the idea is to fill a jar with dehydrated fruits and spices that can be tipped into a pot and left simmering with water to fill a house with delicious Christmas scents. Again, be sure to include instructions so people know it’s to smell, not eat.
8 Stick to cash: Okay, this is definitely not going to inject more fun into your Christmas season, but the reason it’s so annoying is why it’s also effective. Setting a hard cash budget will force you to plan your purchases and prevent overspending. Pro tip: keep separate envelopes for different types of expenses during the holiday season.
9 Curate a Christmas entertainment list: Everyone knows the paralysis of choice that results in wasting half a movie night scrolling through movie trailers and streaming services. Do your friends a favour by compiling a list of movies, books and podcasts you think they and/or their family may enjoy over the holiday period. Divide movies up according to categories (e.g. family, thriller, comedy). And don’t forget to include which streaming service they’re on.
10 Give back: Consider donating your time or money to a charity this Christmas.
