New Zealand’s confirmed cases of coronavirus are still in single figures but the impact on the economy, and New Zealanders' financial lives remains uncertain. "They say the best time to plant a tree is 20 years ago, and the second-best time to plant a tree is today – and the same is true of your finances," said Hannah McQueen, founder of the enableMe – Financial Personal Trainers. Now is the time to be ensuring you’re prepared to weather whatever hit the economy or job market might take.
If people are going to panic-buy toilet rolls, then it's also the time to consider what's in your financial survival toolkit. Higher debt puts you in a more precarious position, so you also need to start with focusing on repaying debt. McQueen says debt reduction and saving are the two things people should look at carefully in order to improve their financial resilience, as well as creating a financial emergency plan. enableMe can advise on how to prepare your finances to weather whatever financial storm the coronavirus creates.
There is no downside to getting your financial house in order – it will enable you to become more recession-proof, it will give you the greatest chance of being able to act on any silver lining that might eventually appear, and if the worst doesn’t come to pass, you’ve still improved your financial position!
In a recession how much cash is going out the door when your income drops is your biggest concern, so you need to review your fixed mortgage rate or rates, because if the economy takes a hit there's a greater chance rates will fall further. You might consider breaking your mortgage now and re-fixing when rates are lower, if it's likely a net saving could be achieved.
The financial planners at enableMe advise you to, “keep calm” – but don’t just carry on as usual. Take this as an opportunity to review what it costs to run your household, consider putting any unnecessary spending on hold, put cash in the kitty for emergencies and sell unused items to help create that buffer if need be.
Whether the panic about the coronavirus and its economic impact turns out to be founded or not, there are no downsides to putting yourself in a more resilient financial position, so for more information on financial advisors Auckland, retirement investments and certified financial planners please go to http://enableme.co.nz .