Everywhere you turn, there is talk of either the pandemic or the sure-fire economic recession it is meant to trigger. This is what is trending and it is hard to unentangle facts and information from fabrications and falsehoods.
Even in Western Australia where all has been well health-wise for several weeks now, we are still interconnected, and thereby not entirely immune to the happenings around the world and in other parts of Australia – like in Victoria. There is growing talk of things slowing down and taking a downward turn.
Compared to the fire drills and safety exercises of yesterday that would last only a couple of hours at most, it feels like the pandemic and its impacts have outlasted our collective imagination. A new reality has emerged in response to this widespread extension – working from home, conducting business and transacting online, reducing in-person social contact and adopting the rituals of a seasoned germophobe – wearing masks and washing hands frequently. Who would have thought?!
But we each understand the urgency of the situation and the importance of practising caution. We understand the need to do everything it takes to safeguard our health and wellbeing as well as the health and wellbeing of our friends, family and loved ones.
Likewise, it is only prudent to be thinking about money and the health and safety of our financial futures at such a time. What would living in this economic climate mean for us? How can we respond to rising uncertainty and instability? What would we need to do to safeguard our money?
Here’s our take. First - Don’t panic. Then, focus on these three things.
1. Increase your emergency savings
Consider making it your top financial priority to create an emergency savings fund, if you don’t have one, and expand and make it comfortably sizeable, if you do. Continue to put away money so you have an amount equal to three to six months worth of expenses in your emergency fund.
It is also wise to encourage your loved ones in creating their own savings and emergency funds. The emergency fund can come in handy when the situation requires it. It also offers you peace of mind, knowing you are covered should the situation become more unstable.
2. Reduce extraneous costs
With auto-debit options available for payments, we don’t realise the costs we incur on services that we seldom use. It is time to smarten up. We suggest that you reduce all extraneous costs. One way of doing this is by making a list of all non-essential expenditures, including recurring subscriptions and memberships. Rank them in order of necessity, then proceed to sequentially remove the items that are ranked near the bottom of your list on a trial basis, for a few weeks or months. You could also look at alternatives or competitors to services on your list, to see if you are getting the most value for money, or if there are better-priced options available.
Using auto payments for recurring bills, such as those for utilities and other essentials, is a good idea. This helps you avoid missing due dates and paying extra in late fees. Some merchants even offer a small on-time payment discount as a bonus.
3. Talk to a trusted financial adviser
There’s only so much you can do amid an event like this. Continue to be diligent, stay informed and aware, and maintain perspective. Talking to a trusted adviser can be a positive step, especially where the matters of your finances are concerned.
Financial advisers can provide tailored advice that is suited specifically for your unique circumstances. It becomes easier to navigate the complexities and cope with changing situations with a partner beside you. They are aware of the legalities as well as any changes in regulation that are of importance to you. They can offer pertinent advice.
Oakmont is your trusted financial adviser. Call us for an obligation-free consultation, today.
General Advice Disclaimer
The information contained on this website and in this blog-post is general in nature and does not take into account your personal situation or circumstance. It is recommended that you consider and use the information provided responsibly and, where appropriate, seek professional advice from a financial adviser.
Although every effort has been made to verify the accuracy and correctness of information, Oakmont Financial Group, together with our consultants, officers, agents, and employees, disclaim all liability for any loss or damage suffered by any persons directly or indirectly relying on this information.