herald Sun: Financial do’s and don’ts during a pandemic with She’s on the Money’s Victoria Devine
Financial expert Victoria Devine says there’s a lot you can do to be in a better financial position right now. Picture: Miranda Stokkel Photography.
As appeared in the Herald Sun Newspaper on the 3rd of September 2020
It’s difficult to stay buoyant in a time so shrouded with fear and uncertainty, especially for Victorians who are in the throes of a new six-week lock down. As a financial advisor, my inbox has been flooded with questions about safeguarding personal finances and many of those questions are likely swirling around in your head too. Instead of panicking, take charge with the following easy to manage steps.
THE DO’S.
Save where you can.
We’re all saving on eating out at the moment, but pay attention to money you may be mindlessly spending on meal delivery services. Try and pare back all non-essential spending during this time and stick with those items you must pay for like petrol, bills and groceries. If you need a tangible way of reflecting on your money habits and identifying where you’re falling down, a good idea is to print out your last three months of bank statements and comb through them with a highlighter distinguishing your essential spending from your non-essential spending. If you can pinpoint where you’re spending frivolously and pause this spending for the next six weeks, you’ll be surprised by the difference it will make to your bank account.
Consider refinancing your mortgage and save where you can.
Now is a great time to make the most of the incredibly low interest rates available and think about refinancing your mortgage. If you can maintain your current repayments on a decreased rate, you could trim years off your mortgage and save hundreds of thousands of dollars by doing so. It’s also a really good time to have a look at any personal debts or credit cards you have and prioritise getting rid of that debt as soon as possible. Apps like WISR which round up your purchases and contribute your spare change to your debts can be incredibly helpful when you don’t have a lot extra in your budget to contribute towards debt repayments to boost your repayments and feel more on top of them.
Upskill.
If you’ve lost your job and have extra time on your hands, consider increasing your employability by upskilling. This could help you land a job when the climate steadies, and will help you feel you’re progressing rather than stagnating. If this doesn’t sound workable for you, then don’t feel obliged; there’s an idea floating around that we need to emerge from lockdown smarter, fitter and stronger, when really many of us are just struggling to get through the days. If this is you, then know that it’s enough just to be surviving through this time.
Victoria Devine and Georgia King host the finance podcast, She’s On The Money. Picture: Miranda Stokkel Photography
THE DON’TS.
Superannuation withdrawals.
Millions of Aussies have already done it, but if you can, avoid dipping into your super. The danger of prematurely pulling funds from here is that the money you are debiting may seem relatively modest now, but at the time of retirement that money will be worth so much more. Canstar did the maths and found if you’re 25 and have withdrawn the previously available $20,000 from your super, you’ll be robbing your retired self of $150,000. Naturally the older you are the less of a financial hit your super will take, but no matter your age, you will be impacted. If you have already dipped into your super, then please make sure you’re replenishing the withdrawn funds when possible so that you’re not worse off down the line.
Refrain from selling your shares.
It can be tempting to cut our losses and run when we see the value of our shares drop, but we only lose money when we sell our shares for less than what we bought them for, turning that paper loss into a tangible one. The key here is to remember that investments in the stock market are for the long term, not just for a few fleeting years – the market will turn around, but it won’t happen overnight.
Don’t feel guilty or too proud to seek help.
Don’t feel guilty or be embarrassed to reach out for help when you need it. Jobseeker and Jobkeeper payments have been amended but also extended, so do your research and see what payments you may be eligible for. The National Debt Helpline (1800 007 007) is another great Australian resource offering free, confidential and professional financial advice to callers, and most banks are also offering financial hardship assistance to customers, be that in amending the terms of your loans or temporarily halting repayments for a period.
Don’t be too hard on yourself.
Now is not the time to berate yourself for being lazy or anxious – treat yourself with kindness and pay close attention to the way you are feeling. If you need help or counsel, seek it out – don’t feel guilty or too proud.
If you’re completely bewildered and need a clearer understanding of your financial standing, then see a financial advisor who can assess your situation and help you create a plan according to your needs.
THE GIST:
1. Temporarily tighten the purse strings
2. Hold onto your shares
3. Upskill if it’s right for you
4. Avoid dipping into your Super
5. Refinance