12 August 4 Common Financial Mistakes to Avoid During a Crisis August 12, 2020By ICI Administrator Aspire 0 By Fran Hughes is a Certified Financial Planner and Head of Financial Solutions at Nexia Perth, www.nexia.com.au Not paying attention to the household finances According to a study by Deloitte Access Economics[1], a worrying 14 percent of Aussies struggle to pay their bills (including rent, mortgage, utilities and credit cards). The study found that 26 percent are spending more than they earn and live from pay to pay. Taking the time to pay a little more attention to the household finance, will ensure that you stay financially afloat and not fall into unnecessary debt. Start by listing all discretionary spending and cancel out any non-essential spend. Identify those recurring direct debits to subscriptions to services you no longer use. Perhaps home cooking will do rather than Uber Eats. Schedule a payment plan with essential providers such as utilities and rates. Discuss holiday repayment options with your bank or landlord. Try using a spreadsheet or budgeting app (www.moneysmart.gov.au) to make tracking your spending during this time much easier. You’ll quickly get a true picture of your financial health. Not actively building up emergency funds The study by Deloitte Access Economics[1] goes on to find that 13.4 million Aussies don’t have emergency savings to fall back on if they are out of a job. While we could not have predicted a pandemic, it certainly has exposed the financial vulnerability of not ‘saving for a rainy day’. A general rule of thumb is keeping aside three to six months’ worth of living expenses in an easy-to-access bank account. With banks letting borrowers hit pause on their home loan repayments, and as many as 375,000 individuals applying for the holiday repayment relief, saving any excess surplus into an emergency fund to cover delayed repayments will see you in a stronger financial position. Assuming Estate affairs are in order Half of Australians do not have a Will. Alarming isn’t it? Of these numbers, 34 percent gave reasons of ‘haven’t got around to it.’ Without a valid will, your estate affairs could lead to financial chaos. In light of the current pandemic which has fatal consequences, setting up your estate affairs is top on the list. A simple Will can be drafted up by a lawyer for as little as the cost of smart TV. Not seeking the advice of a professional In times of a financial crisis, most would opt for a ‘Do-It-Yourself’ approach to save on costs, rather than seek the advice of a financial professional. Working alongside a subject matter expert such as financial advisor, may just achieve the results you were looking for without the financial stress. Speaking with a financial planner can help guide you to make smart money choices. You can use the Financial Planning Assoc Match My Planner tool to reach out to a CERTIFIED FINANCIAL PLANNER® professional near you. [1] Source: Financial Consciousness Index (FCI) by Deloitte Access Economics [2] Source: Financial Consciousness Index (FCI) by Deloitte Access Economics Related Posts 5 Top Tips to Avoid Zoom Fatigue and Run Effective Meetings In today’s current climate, we are all engaging in video conferencing more than ever before. Set to become a regular part of the way we do business in the future, here are 5 top tips for avoiding Zoom fatigue and maximising the video meeting Keeping Active During the Festive Season If you have been diligent with your training and rituals for the past few months you should be looking and feeling so much better than you were only a matter of months ago. The weather is warming up quickly, and the festive season is just around the corner so let’s not let the ball slip now. Blended Families Whatever your marital status, your 40s can be a challenging time financially. Growing kids are costing more, especially if you have to factor in school fees. And on the other side of the equation, family income may be coming from only one working partner. Advice for parents with adult kids at home: helping your little ducklings to fly The latest Housing Income and Labour Dynamics (HILDA) survey paints a stark picture of the affordability for young adults to move out of the family home. It found that over 50 percent of young Australians aged 18 to 29 still live with their parents, with the numbers climbing faster for women. New Year Resolutions And Smart Goals The start of a new calendar brings renewed focus to the year ahead, and an ideal time for new year resolutions. With the year we had in 2020, the feeling is that most are writing-off the year that was, and setting new goals for the year ahead, 2021. Is It Time To Review Your Insurance? The current health crisis has put on a spotlight on the need for life and disability insurance. But with household budgets under pressure from the economic fallout, Australians are balancing the need versus affordability. Comment (0) Comments are closed.