The young Aussies who were choosing to live frugally before COVID-19

Young adults, like my own children, have been hit disproportionately hard by COVID-19. Their lives - and often those of their parents - have been turned upside down. How do you set them right again?

Many adult children are moving back home with their parents and seeking financial help.

More than 10% of under-20s and 9% of 20-somethings suddenly lost their jobs in the pandemic lockdown. Or if they are still employed, taking pay cuts, working fewer hours or being stood down on unpaid leave are also leading to requests for financial help.

Already young adults are a generation with few resources. Many carry student debt and have to pay high rents in capital cities if they live away from home. They have low superannuation balances and are largely priced out of the property market, which is predicted to fall by as much 30% as a result of Covid-19.

Their short-term casual work, which is often in hospitality and tourism, means they often don't qualify for JobKeeper's $1500 a fortnight. But they do get JobSeeker's $1100 or, if they are under 22, the lower rate of Youth Allowance.

While parents want to help, in many cases their own income and retirement savings have taken a hit and they must ask themselves if they can afford it? You don't want to endanger your financial security and face an impoverished old age and have to rely on the same children you are trying to help.

When something like COVID-19 comes along, it shows up any flaws in what we do with money and shines a spotlight on past financial decisions.

It is an apt time to evaluate our finances - probably the last thing young adults would want to do. But let's face it, a lifestyle of going out, shopping (buy now, pay later), ordering takeaways with home delivery and going on holiday has come to a screeching halt. What do they do now?

Some who have lost their jobs have told me how worried they are about their debts, car loans and mortgages. They are racked with regret and often ashamed and angry for not having saved more when they had a good income.

Dipping into super to help pay the bills appears an easy answer, but it will hit the compounding power of their nest egg. A 30-year-old who accesses the full $20,000 available under the scheme could lose more than $79,393 from their retirement balance, according to Industry Super Australia.

Watch out if your children cancel insurance for their car, health and home and contents. This would leave them vulnerable to accidents and theft.

Anyone with savings and little or no debt is in a better position than someone with money owing. To help improve your financial position, there are plenty of inspiring, detailed real-life blogs dedicated to living a simple life and saving hard.

Pat Seyrak, who writes about financial independence on his blog Life Long Shuffle, says a person with savings and lower lifestyle costs is in a far better position than someone living from pay day to pay day.

The key to these bloggers' financial security is cutting down their consumption to buy only the things that provide value and happiness.

Often they start out with debts. Young people such as Tasha, who writes Tasha Gets Frugal, reveal how they pay it off, build an emergency fund and start saving and investing.

Another inspiring young adult is the young copywriter Michelle Ives whose journey you can find at thatgirlonfire.com. Or young families on Instagram such as frankonfire and treadingfire.

One of the most motivating savers is Serina Bird, author of the book The Joyful Frugalista, which is a hit with my youngest daughter. Check out Serina's website joyfulfrugalista.com.

Dave, from personal finance blog Strong Money Australia, retired at 28. He says bunkering down at home is a great time to start appreciating the simple life and for self-education, exercising and slowing down. At 31, he has been doing this for the past three years and says while the COVID-19 circumstances are far from ideal, and they're causing a great deal of anxiety, there are upsides that can make a difference to your life.

Seven inspirational Aussie money bloggers

• Life Long Shuffle
• Tasha Gets Frugal
• That Girl on Fire
• @frankonfire
• @treadingfire
• The Joyful Frugalista
• Strong Money Australia

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