26 August 20
Reading time: 6 minutes
We’re living in such a changed world that it can feel overwhelming. COVID-19 continues to upend our working lives, our kids’ lives, and our money lives as well. That said, there's a lot we can do: here are 7 things to do straight away.
We’ll get through this together, so no need to panic. Emotional situations tend to lead to poor financial choices, so be sure to get the help you need as you make financial decisions during an emergency. Take the time to get information and advice on what you would like to do.
The government is acting to support the economy, including leave and self-isolation support, subsidised wages, and business cash flow and tax measures. Find out more on the official COVID-19 government response site.
Especially during an emergency, creating a money plan is key. Financial stresses can cause considerable hardships for you and your family – so having a plan helps bring peace of mind.
If you don’t have an emergency fund, consider putting some money aside each time you’re paid if you can. Depending on how the situation evolves, you may need to rely on your safety net sooner than expected.
If you feel you need to borrow to get by, it’s important not to run to the easiest money available. A short-term payday loan online or a KiwiSaver hardship withdrawal may first come to mind, but there may be other options are likely to be better: government support, temporary loan or mortgage deferral, or consolidating your debt to a lower interest rate with more manageable payments.
The goal is to get through and create as little debt as possible.
The earlier you talk to your bank or lender, the better. You might be surprised how they’re willing to make things work with you and your loan. The sooner you get in touch, the better placed they are to help you deal with financial stress. After all, they deal with this sort of thing all the time. Depending on what you’re experiencing, your lender could:
Crises tend to bring out the best in all of us, but unfortunately the worst can also be seen if you look carefully. Frauds and scams related to coronavirus are popping up like poisonous mushrooms, especially online, so make sure to verify every call, link and email that comes your way – it could easily be a fake. A good way to check is to make a separate call to a published number to make sure something’s the real deal.
You may be concerned about KiwiSaver’s ups and downs. As long as you're in the right type of fund for you, feel free to not look for a while – just ride it out. This is true for most KiwiSaver members, unless you plan to use the money to retire or for a first home in the next three years – in which case, it might be good to shop around for a defensive fund. Here are some FAQs for KiwiSaver members.
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