The last few months have been extremely challenging for businesses, families and individuals. No matter what your personal circumstance is, we have all been affected in some way by COVID-19, both personally and financially.
There are many things that we can’t control but now more than ever it is important that you keep a close eye on your finances and spending habits.
Here’s our 5 tips to avoid a spending spiral during lockdown and into the future:
1 – Review your expenses
It is a good idea to review your outgoing expenses at least every 2-3 months. Make a list of outgoing bills, rent/mortgage payments, insurances, money spent on groceries, recreational spending etc. and work out what your priorities are. Visit the government MoneySmart website has some great tips on budgeting.
2 – In case of emergency
Building an emergency fund can be a huge safety net should any unexpected bills or costs. The current situation highlights the need of an emergency fund. When you’re able, consider setting up a regular automatic transfer to your fund every week/month or whatever works best for you. The more money you can put away the better your peace of mind.
3 – Avoid impulse purchases
As we continue to spend considerably more time at home, the temptation to online shop is more readily available. Before clicking ‘buy now’, consider the ‘sleep on it’ approach and the next day ask yourself if you really need the item.
4 – Hands off your credit card!
Avoid using a credit card unless completely necessary – think of it as a last resort. If you do need to use one, make sure you pay your credit card balance in full every month to avoid interest fees. Read our article ‘Credit Cards – The Good the Bad and the Ugly’ to help work out how dependent you are on credit cards and how to manage them.
5 – Utilise government support
If you haven’t already, check to see if you are eligible for government support such as JobKeeper or JobSeeker. For more information visit https://moneysmart.gov.au/covid-19/financial-assistance.
If you have any questions, please contact us on 03 9886 0800 or via email.
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Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686).