02 Apr Six Things You Must Do To Financially Survive Coronavirus
Six Things You Must Do To Financially Survive Coronavirus
I know for a lot of you this has been a very challenging week. It breaks my heart to hear and see people losing their jobs, their small business and their life’s work during these unprecedented times.
We have been working very hard with all of our members who have been impacted by this and it is great to see the community support and comradery that is out there.
There are a lot of challenging and conflicting information out there, so to provide you with some clarity during these crazy, here are six steps we recommend you follow in order to financially survive coronavirus.
If you want to hear more about this topic, I have done a free webinar which discusses this topic in more detail. Go to www.masteryourmoneynow.com.au/coronavirus for more information.
- Focus on your mental health– I have been made redundant before and it is not a pleasant experience to suddenly lose your job and income. There’s a lot of emotions like anger, denial and frustration and even guilt when it comes to losing your job.
These emotions are completely normal, however they will not help you to move forward into a positive solution.
Speak to friends, family and work colleagues about your situation, but I would also strongly recommend you invest in your mental health as well by seeking professional advice. Places like Beyond Blue and the Black Dog Institute are great places to start.
Someone can present to you a great opportunity, but if you are not in the right headspace to capitalize on this, then it will go missing. Be in a place where you can take positive action to produce positive results.
- Keep focusing on your income– if you have been laid off, keep looking for work.
If you have a skill like a trade, I still believe you will be in high demand over the next six months. Take this opportunity to build your profile and seek work through social media and places like Airtasker.
If your skill set is something that cannot be maximized during this time, look for work in an industry that is seeking more employees. During this time tradies will become truck drivers, baristas will become shelf stackers and waiters will become call center staff.
Woolworths came out recently and said they are looking to hire 20,000 during this time. Another great source for those looking for work in Victoria is https://www.vic.gov.au/workingforvictoria.
This may impact your ego and/or put you out of your comfort zone – this is where getting your headspace right is so important as per step one. You have to do what you need to do to survive.
- Speak to Centrelink– the situation with Centrelink is changing so fast that I won’t make this section too technical about what you can and cannot claim.
But it is likely if your income or business is impacted by this crisis there will be financial support for you.
Importantly, if you have been denied Centrelink support in the past due to your circumstances, family situation (i.e. partner earns too much) or residency status, check again if you are eligible. Assumptions and rules about who can and who cannot claim are out the window!
Just remember that the system is currently overloaded so make sure you retain your sanity while dealing with Centrelink.
- Speak to your bank or broker– For most people their mortgage is their biggest expense. Therefore, it may be appropriate for you to speak to your bank or broker about deferring your repayments if possible, for up to six months.
What you can and cannot do does vary from bank to bank, but the important general rule to note is that if you defer your repayments for six months, you will have to repay more afterwards as the interest is capitalized.
What does that mean? That’s where the interest you don’t pay during your period of deferral is added to your outstanding loan balance.
For example: If you have a $400,000 home loan at an interest rate of 3 per cent, you would be paying $1,000 a month in interest. If you pause your home loan repayments for six months, the interest amount is added to your outstanding balance. So, in six months’ time, you will be looking at paying off a $406,000 loan.
The option is there if you need it, but just keep in mind that the bank will get their money in the long run – they always do…
- Review your budget– now more than ever is a great opportunity to review your budget and cut unnecessary expenditure.
I stress unnecessary expenditure – I wouldn’t be cancelling Netflix or Stan anytime soon…
But if there is something that you are paying for that you no longer require, get rid of it.
But as a caveat, if you are in a position to help your local small business, please do so as they need your support more than ever. Keep buying that coffee, visit that small retailer and keep that gym membership that has now moved online. Be sensible with this of course, but if you are in a position to help those businesses and people that are important to you, please do so!
Bonus Point – What you should not do
Before we get to the sixth and final point, the one thing I would strongly recommend you not do is access your super.
My Millennial Money put out a great post recently stating that if a 25-year-old took $10,000 from their super, they will reduce their retirement balance by $207,245!
Look, if your only options are to use your super or to rob a bank, use your super. But it should be your absolute last resort.
- Seek financial advice – Sadly, when financial crisis’ occur that is when people are the LEAST likely to invest in financial advice.
It makes no sense to me – can you imagine if 2020 was the quietest year for doctors and hospitals on records with this coronavirus running rampant? That would be silly.
But when advice is needed most, people who do not have an existing relationship with a financial planner rarely reach out for help.
The right advice can help you to not only survive this crisis but thrive through it as well. Advised clients are using this time to get their cashflow right, refinance their debts and purchase growth assets at significantly discounted prices.
Mark my words, there will be plenty of people who will make a lot of money as a result of this crisis. Will you be one of them?
If you want to hear more about this topic, I have done a free webinar which discusses the above in more detail. Go to www.masteryourmoneynow.com.au/coronavirus for more information.
If this is a topic that you would like to discuss in more detail, please go to www.MasterYourMoneyNow.com.au/getstarted to book in your complimentary 30 minute strategy session.
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Disclaimer: This information is general information only. You should consider the appropriateness of this information with regards to your objectives, financial situation and needs. Past performance does not guarantee future returns.