A financial fight

SOMETIMES I try to generate empathy with fellow Australians who are suffering severe financial stress, and such a time occurred when I read on Saturday of the increasing number of Hunter people losing their homes to banks.

In that report Donna Page told us that the number of Hunter homes seized by the banks last year was up by almost a third, and that the workload of sheriffs, who do the evicting, has increased significantly this year.

It is almost certain that the number of people evicted because they’ve fallen behind in rent will be much higher throughout the Hunter, and the impact of that in the short, medium and long terms for evicted homeowners and renters will be much the same. A black mark on a credit rating or inclusion on a bad tenants’ list renders anyone a pariah in the eyes of real-estate agents, landlords and banks.

Rents are so high in what is a landlords’ market that I cannot understand how so many people are paying them. I was shocked when I learnt how much rent one of my children is paying for what I see as a painted hovel, but it was, she assures me, the best deal going for the very good reason that it was the only rental property she’d been offered in a long search.

I struggle with the empathy. I have sympathy, a great deal of it, but I cannot readily imagine myself in the shoes of people losing the financial fight. That’s because I am privileged.

Apart from occasionally scrabbling about for change to buy something as optional as a case of premium beer, I’ve never been short of money. If I was ever short of money as a single fellow it was a fleeting paucity. My wife manages our finances, and once or twice a year she’ll groan about all the bills arriving at once, but we’ve never been at risk of not meeting a mortgage payment, of having the electricity or gas cut off, of being unable to pay for a child’s school excursion.

That’s because I’ve been well employed, and that is no more due to my efforts than the plight of many is due to their efforts.

Many people have lost their jobs, or fulltime work, in the great reorganisation foisted on so many industries, mine among them, and when they’ve come to sell their house some will find that it is worth less than they owe. The renters among them will be unable to come even close to the huge rents they struggled to pay even when they had a fulltime income.

Then there are those who simply cannot keep up with the bills, who fall further behind each week, and managing the finances will be a matter of paying just enough to keep the biggest wolves at bay.

Wendy Maile, the manager of Lifeline’s financial counselling service in the Hunter (4940 2000), tells me that high rents and high energy bills are the big problems now, and that while tax cuts and increased welfare benefits as carbon tax compensation and the schoolchild bonus payment have eased the number of people seeking financial counselling, it will be a temporary dip.

The reality is, Ms Maile says, that in many homes the schoolchild bonus to help pay for uniforms and other essentials will go directly to electricity and gas providers.

She says, by the way, that more people in small business are seeking financial counselling.

What, I wonder, is the shape of the day for people fighting off financial catastrophe?

It is, Ms Maile says, $1 bread, discount milk, generic brands, a balancing act to stave off the bank or landlord and the energy company, and when there’s no money for food the family goes to a charity. Many will make silly decisions – they don’t have $500 for the car payment but they do have $50 to take the family to the movies. I can understand that.

There is much worse in store if the worst comes to the worst and they’re evicted or go bankrupt. No housing loan, no place to rent, and much of this terrible disadvantage will persist long after the term of the bankruptcy. The impact on the parents and the children may be lifelong.

The tipping point, I suppose, is when a financial struggle becomes hopeless. That must be a terrible anxiety.

Are you in financial straits? Tell us about the impact on you and your family.

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