Things have changed quite rapidly in the last few weeks with regards to the coronavirus and how this is affecting all of us.
There are several key steps that will support you in maintaining financial security in these challenging times.
- Understand your current position
Many businesses, both big and small, from a plethora of industries will start to feel the pinch from the global pandemic.
This will put more pressure on businesses to cut costs, which includes reducing staff numbers.
It is important to understand your current financial position. This will support you in not only building a new budget but understand what assets can be liquidated if required.
- Make a new budget.
With uncertainty you will need to reconsider your budget & look at how long your cash can be stretched out.
Work out a weekly budget – don’t forget your bills, quarterly, six monthly, and annually and make sure you can cover these.
This also includes talking to your banks/lenders to see if your repayments can be paused or stopped for a period if the coronavirus has affected your income.
- Review your loans
You may have a home, personal or car loan. Whatever the case may be, you will need to assess your ability to meet your repayments.
During these uncertain times, many are looking to refinance with lower interest rates.
Furthermore, many lenders have come out & stated that they are allowing their customers to put repayments on hold if the coronavirus has affected them – whether they are sick, have had employment hours slashed, been stood down or made redundant.
- Government benefits
There is a plethora of new measures the Federal Government has announced.
- Newstart/Jobseeker/Unemployed Benefits
The jobseeker allowance has recently been increased from $565 per fortnight to $1,100 per fortnight.
However, there are varying factors that determine your allowance. Whether you are single, couple, have children or are over the age of 60, in addition to your household income.
- Age Pension
Those on the Age Pension will receive a lump sum payment of $750 now and another one in July to support them in these difficult times.
In addition, the deeming rates have been lowered from 12 March 2020, which will support many retirees that have had term deposit rates and investment portfolios fall over recent months.
- Early release of superannuation benefits
The Government is allowing affected individuals to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21.
If you are eligible, you can apply online through myGov for early access to your super from mid-April 2020.
- Insurance
Life insurance is the last thing people want to talk about, but it’s the first thing they check for when a loved one dies.
During these uncertain times, many are looking to protect themselves and their families from the global pandemic.
While you remain unemployed your income protection policy may not be valid – you need to check what you have and what you are paying for and what is the most appropriate for your specific situation.
There have been some super funds that have a clause to exclude global pandemics, so it is critical to review your insurance cover to ensure you & your family are protected.
- Review your financial plan
Think about the big picture during these uncertain times. Steer clear of making rash decisions at this time but make sure your plans remain in line with your financial goals.
Go through your last financial plan – update your assets, liabilities and income.
More importantly during this time of isolation, sit down with your spouse and review your goals, discuss them, update them, and inform your financial planner of your updated goals and ask how this will affect your financial plan and strategy.
Furthermore, it is imperative that you have an up to date Power of Attorney and Wills, to ensure your wishes are carried out.
With things changing each week, each day and even each hour, your financial plan needs to be fluid.
- Mindset
The global pandemic will hit hard and affect you in many ways.
Do not underestimate the effect that this has on your whole being – including your mental health.
This may possibly be one of the most stressful times ever for you and your family, and we recommend you reach out for assistance should you require help to get through this crisis.
In addition, stay connected with friends and family as this will be extremely difficult for all.
