With the extraordinary level 4 lock down finally over, enableMe's Hannah McQueen is encouraging people to lock-in their lockdown savings to improve their financial resilience. Hannah says for many of her clients it is the first time ever they have hit their budget, because lockdown provided so few opportunities to spend. She’s now asking them to maintain their lockdown spending for at least another month, to help them build resilience quickly. The exception to that is if you’ve got a plan, and a buffer that will allow you to survive without income for the next six to twelve months
Most people’s spending behaviours will revert back to what they’ve always done as life starts to return to normal, which is to say, in a very Kiwi way, “It will be okay in the end”. This tends to work in strong market conditions, but market conditions are not going to be very strong for a year or more, so everyone needs to be more tactical for the next six months. For all those who want to spend, spend knowing that the economic fallout is still six months away, and only spend if you know that you can without upsetting your tactical financial plan.
As we come out of lockdown, the opportunities to spend increase exponentially, and of course people might want to support local businesses that have been hit hard. Hannah’s advice is, “Please spend, but only if you know your house is in order for the next 12 – 18 months.
The wage subsidy will soon come to an end, and mortgage holidays will too, which means things could get worse before they get better. Those measures gave people six months to get ready for whatever lies ahead, but Hannah says too many people haven’t made the most of that time to prepare and have instead chosen to relax.
In times of uncertainty, good planning is a must, and to make good decisions you need a clear head and a strong plan, and enableMe are there to help you with both, so for more information on mortgage advisors and financial planning NZ please go to http://enableme.co.nz .