The pandemic continues to disrupt our professional lives, our children’s lives, and our financial life. That being said, there is a lot we can do right now: here are some things you can do right away in terms of finance.
Avoid decisions based on fear
We will get through this together, so don’t worry. Emotional situations can lead to bad financial judgments, so seek the support you need while making financial decisions during an urgent situation. Take the time to gather information and guidance about what you want to accomplish.
Find out what financial help is available
The government is taking steps to help the economy, including paid leave and self-isolation, salary subsidies, and business cash flow and tax relief. More information may be found at the official COVID-19 government response website.
Make a crisis money plan
Making a financial plan is extremely crucial during an emergency. Financial difficulties may create significant problems for you and your family, so putting a plan in place can help offer you sense of peace.
- Consider a scenario in which your income is reduced. To effectively manage your money, you must first determine your incomings and cash outflows.
- Concentrate on your current “needs” and eliminate any superfluous “desires.”
- Assign a task to each and every dollar. This implies that you select how your money will be spent and prioritise what is most essential.
- Put any excess funds you have – even if it’s only $5 or $10 – into a safety nett.
Find out all your options before taking on more debt
If you don’t have emergency savings, consider setting away some money each time you are paid if you can. Based on how the crisis develops, you may find yourself needing to rely on your safety nett sooner than planned.
If you sense you need to borrow more funds to get by, it’s critical that you don’t go for the cheapest option. You may be considering a KiwiSaver withdrawal and applying for ‘significant financial difficulties,’ but you want to be sure it’s the last solution. It’s critical to understand that your KiwiSaver funds can typically be used to cover day-to-day costs but not to pay off debt. Tapping your KiwiSaver is a major decision that will impact your future in some manner, so you want to be sure it’s a good one.
A relatively brief payday loan online or a KiwiSaver emergency withdrawal might spring to mind immediately, but other choices are likely to be more effective: government assistance, short loan or mortgage deferment, or refixing your loan to a lower interest rate with more affordable payments. The aim is to go through with as little debt as possible.
Can’t make repayments? Talk to your lender as early as possible to make arrangements
The sooner you contact your bank or lender, the safer. You might be amazed at how eager they are to collaborate with you and your mortgage. The earlier you contact them, the more equipped they will be to assist you in dealing with finance related stress. And besides, they have to cope with this all the time.
Depending on the circumstances, your bank may: Temporarily halt loan payments. It’s critical to understand that even if your payments are suspended, the interest will continue to accumulate – a loan deferral increases the cost of the debt.
Here are some tips to consider
- Move you to interest-only payments
- Restructure business loans
- Consolidate loans to make repayments more manageable
- Provide short-term funding
- Stay safe from COVID-19 scams
Crises tend to bring out the best in everyone, but if you look closely, you may also see the very worst. Frauds and scams involving Covid-19 are proliferating like deadly mushrooms, particularly online, so make careful to double-check every phone call, link, and email you get — it might be a forgery. To ensure that anything is legitimate, make a separate call to a public number when it comes to dealing with funds.
Talk to an expert financial advisor to ensure that any step you take to help your emergency situation does not have many risks involved with it. Contact us and we can help you manage your funds in these difficult times.