How hospitality workers can get out of debt
December 17, 2020
Hospo workers in debt – Part 2
Eek, you’ve got a debt. Ok, a few of them. So many hospo workers are dealing with debts, and thanks to all those buy-now-pay-later options, the problem is getting worse.
In our two-part series about hospo workers in debt, we’ve already looked at ways to avoid debt here.
But what do we do when we get into debt and we’re not earning enough to get out of it? Here are some tips.
Don’t ignore it
It might be tempting to bury your head in the sand, but doing that will only make the situation worse. It’s time to put on your big kid pants and admit you’ve got a problem. Don’t be embarrassed, many hospo workers are in your exact position, particularly after COVID decimated our incomes. The important thing is you’re doing something about it.
Make a list of your debts
Sit down and look at all your debts – credit cards, by-now-pay-later, any other bill you’re behind on. Then list all your other expenses – rent, food, bills, transport etc. Make sure you include all the fees and interest rates as well. Put the list up somewhere visible like on your fridge. Having a good awareness of your debts will inspire you to tackle them.
Work out which debt will make the most impact
Instead of paying a small amount across all your debts, work out which debt is costing you the most. It might be a credit card with a high interest rate. Pay the minimum payments on your other debts and concentrate on paying any additional money you have towards that expensive debt. Studies have found it’s more motivating to get quick wins when paying down debt, so you’re more likely to keep working towards reducing your debt in the long term.
Speak to your credit provider
When you’re trying to get out of debt, it’s important to speak to your credit provider to let them know that you’re struggling with the repayments. They might put you on a ‘bill smoothing’ plan where you pay in smaller instalments rather than one enormous chunk.
Get some help
Look into your options for government support like additional benefits from Centrelink or other services and benefits. You might qualify for some concessions on your bills that will help you reduce your debt in the long term. There are also community organisations that offer low-cost loans for people on a lower income.
Get a financial counsellor
If you’re struggling with debt and not sure where to turn, many community organisations, community legal centres and some government agencies offer free financial counselling. This is a confidential service with people who can listen to your situation and go through options like how to improve your financial situation, speak to your creditors and explain things like bankruptcy, debt agreements and other alternatives.
Do some extra shifts
If you’re trying to pay down your debts, any extra money comes in handy. Have a chat with your employer about whether you could work a few extra shifts. Perhaps you could be on standby if anyone is sick or unable to attend work? If you’re willing to be available at the last minute, it could be a good way to increase your income.
Make sure you’re getting paid right
When you’re struggling with debt, look for money wherever you can. One way is to make sure you’re being paid the right wage. Lots of hospo workers are owed a fortune by previous employers too (by law, you’ve got six years to reclaim stolen wages). Check out the PayChecker feature on our Mobilise app, then check out our fact sheets and ask a question if it turns out you’re not getting the right pay. Find out how you can win back what you’re owed.
Find out how other workers have won back stolen wages using Mobilise.
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