Once the worst has passed, everyone will be keener than ever to get things rolling along again. For now, we have to bunker down and do what we can to weather this storm and minimise the risks.

Locking down your financial future

These uncertain times can bring stomach-churning worry about our financial future. However, we need to remember that there’s no point worrying about what we can’t control. There are plenty of things we can still control, so let’s focus on those instead.  Here are some things you can do to better manage your financial wellbeing:

Know where you stand financially 

Review (or create) your budget and see where you can cut costs. Strip everything back to the basics and take stock of what you own and what you owe. It will assist you to make appropriate financial decisions if you know where you currently stand financially. 

Contact your credit providers if you foresee financial difficulties ahead. Most financial institutions offer payment options to people in financial hardship. 

Super

Boost your super: while markets are experiencing a downturn, why not put a little more money into your super, if you can afford it? Always look for the silver linings and opportunities in challenging times. The most important thing to remember about your super is that it’s a long-term investment - don’t panic. Historically, after every crash there is an upswing: we’ve seen that with previous pandemics, such as SARS  and other global events like the GFC. If you have not yet retired, you may be better to leave your super alone, with investments that suit your investor profile and investment time-frame. Instead, use the current situation as an opportunity to trim your costs and think about boosting your super while you can buy units in your investment portfolio at a low cost.

Find out more about contributing to your super during market volatility.

Check your insurance cover within your super: if you have insurances through super check how much you are covered for. When life changes so may your insurance needs which makes this a good time to review your insurance within your super fund. 

If you have member paid insurance in your super account e.g. income protection cover, which you pay for out of your own super contributions, make sure you have enough funds in your account to pay your premiums to avoid losing your insurance cover.

Banking

Low interest rates: With the interest rates at historic lows, now may be an opportune time to get ahead with your home loan repayments, if you can. Alternatively you could consider topping up your offset account, to give you the flexibility to re-draw funds in case of emergency. If you had already built a buffer in your offset account, you may be able to withdraw some of this buffer to provide short-term access to low-interest funds if required. Speak to your lender or financial adviser to check if these options may be suitable for you.

Government benefits

The Federal Government has announced an assistance package for businesses that need financial support to get them through this crisis. If you are a business owner, check the government website for businesses for details on eligibility.

The Government has also introduced two payments of $750 each to provide economic support for individuals. To see if you are eligible check the Centrelink website.

Avoiding financial anxiety

We’ve been through some things you can do; let’s look at some things NOT to do.

Health insurance

CHOICE health insurance expert, Uta Mihm, says: "Do not buy or change your private health insurance policy because you're worried about COVID-19. It will not affect the quality of your treatment." If you do need hospitalisation, you will most likely be treated in a public hospital anyway . This is a sentiment backed by the Department of Health.

Credit cards/Buy now, pay later

Don’t pay high penalty interest on your credit card: check your balance and pay it off on time.

Avoid the temptation of using after-pay or zip money. No one knows for how long this uncertainty will continue, so it’s best to be conservative with your spending. Don’t get out of your depth with expenses you may not be able to pay back later. 

Data

With kids staying home from school learning online and parents working from home, make sure you avoid bill shock by monitoring the amount of data being consumed in your household. It might be the time to review your internet service and shop around for more data at a cheaper price. 

In the short- term at least, most of us are going to spend a lot more time at home than we’re used to. Stay calm and focus on the things you can do and we will make it through these uncharted waters, together. 

For more hints and tips follow our COVID-19 dedicated webpage. 

 

  1. https://investors-corner.bnpparibas-am.com/investment-themes/coronavirus-lessons-from-sars-for-investors/
 2.  https://www.choice.com.au/health-and-body/conditions/cough-cold-flu/articles/10-things-you-do-not-need-to-do-to-prepare-for-coronavirus