The gift we’ve been given is the opportunity to take stock, review where we are at and set ourselves up for the future we want to live.
We’ve been in such uncertainty over recent months, and for many of us the uncertainty will continue. With the ‘economy’ starting to open back up, as social distancing measures start to ease, businesses will start to find their feet again. But many industries, and businesses, will still suffer, some may not have been able to weather the part of the storm we’ve already experienced, and for others the storm may get heavier, and more testing. There’s still so much unknown.
When an industry suffers, or a business suffers, there are of course flow on effects; like a falling row of dominos, and end with fatefully damage individuals’ livelihoods. And while the government’s measures are going some way to help people, it hasn’t captured everyone, or plugged all the holes for those it has helped.
So where to from here?
We should focus on what is within our control.
This is the time to reset and get your financial house in order. And that also means making savvy decisions wherever possible to be prepared for whatever tomorrow may bring.
Here are some key steps you should take:
- Do a budget
Know your numbers on what it costs to run your life. Separate the essentials (the must haves) from the nice to haves. Get rid of all unnecessary spending for now and reduce whatever else you can.
- Build an emergency buffer
Build up at least 3 months of your ‘must have’ expenses and put it away in a separate bank account, or in your offset account.
What can you get a better deal on? Contact your bank, utilities, phone, internet providers. What subscriptions, memberships, plans have you got that you don’t really need? You can always reinstate later when the seas are smooth.
Automate and smooth payments where possible. Set up direct debits for regular expenses, put in payment plans (or put money aside) to ease the load of ‘big’ irregular expenses.
- Automate your money
Divide your pay-check into separate accounts, take care of the ‘must-haves’ firstly and then give yourself an allowance for your discretionary and ‘nice to have’ spending. Do this on a weekly basis so you don’t risk a blow out.
- Review your debts
Put a plan in place to reduce any high-interest personal debts first. Get a better rate while you repay if possible.
And, always practice and remember:
Spend less than you earn
This may seem basic and common sense, but failing at this is the main cause of people getting into financial trouble. Make sure you have money left over each pay check and put it towards getting rid of personal debt, building an emergency fund and then saving. Now is the time to save like never before.
I’ve developed a range of resources that can help put you in control:
See my budget tool to help you work out where your money needs to go
I have created a guide with some key tips for Good Financial Management
And if you’d like to go on the waiting list for my Financial Kick-start program, register your details here.
Now I realise some of these tips may be really hard for those that have already lost significant income.
If you’re in this situation and find yourself really struggling to make ends meet, here’s some additional tips for you:
- Are there any ways you can make some extra money?
Don’t let pride get in the way of your financial security, some money coming in from something you may be ‘overqualified’ to do is better than none at all. Only rule is to stick to your morals.
- What can you sell?
As the saying goes, one person’s trash is another’s treasure.
- What can you hit pause on or renegotiate?
Repayment holidays and repayment plans may be options on some of your ‘must-have’ expenses but these just give breathing space, they aren’t a long-term solution.
Here are some additional links to great resources if suffering financial hardship due to the pandemic:
- Financial Hardship policies with utility providers: https://www.finder.com.au/financial-hardship-programs-utilities
- Bank contacts to discuss your loans if you’re experience financial hardship: https://www.ausbanking.org.au/for-customers/hardship-contact-details/
- Use the government’s energy comparison tool to help you find a better deal: https://www.energymadeeasy.gov.au/
- And you can visit Visit Services Australia for more information on payments and services if you’re affected by COVID-19.
Please feel free to get in touch.
Money Mode Advice Pty Ltd (ABN 29 627 492 791) is a corporate authorised representative of First Financial Pty Ltd (AFSL 481098, ABN 15 167 177 817)
This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. This presentation provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.