This quote was made during the GFC; however, 2020 has shown it is still very relevant. The financial stress caused by the COVID-19 pandemic has revealed many people 'swimming naked'
Previously, perceived to be keeping their head above water, the tide is out, and financial stress is starting to show. Many people have a history of living from pay to pay, and while everything in your life runs smoothly, you get by.
Your employment is consistent, everyone is healthy, the car runs efficiently, termites have not been silently eating your house beams, and the fridge keeps running cold, everything is okay, It may have been a little stressful from time to time, but you 'move' money around, use a credit card or two, and you get by again until the next big bill arrives.
2020 & 2021 has made people more aware of the need to reserve funds to help manage the day-today expenses for when life is not ideal. Spending Planning is an emerging industry that provides the missing piece of the puzzle when it comes to the financial services available in the community.
It’s not your fault, we generally grew up without financial literacy and are now playing catchup Is it time to get your ‘house’ in order? Both business and personal finances can be very challenging but have been particularly so, in 2020 & 2021.
Understanding what you need in the bank today to ensure your bills can be paid without stress, is what we do. Do you ever wonder where your hard-earned funds are? The more you earn, the more the dollars go missing. Based on a household income of $80,000 - $120,000 it is not uncommon to find $8,000 – $10,000 a year that has been leaking out of your pockets.
Seven Tips to help start getting your house in order
- Lazy Tax – are you paying Lazy Tax? How long is it since you have researched a better premium rate for your bills? Car insurance, House and Content insurance, Gas and Electricity for example .
- With Car and Home insurance, it’s possible to pay a lower annual fee and a higher excess if you ever need to make a claim
- Reassess the interest rate on your Credit Cards, some are as high as 25% or down to 11%
- Have you looked at your Home Loan interest Rate? Call the mortgage company and ask for a better rate, if they say they can’t change it and you have an interest rate higher than mid 3%?
- If you have done a Balance Transfer on your credit cards, work out how much you need to pay each month to pay the whole thing off by the end of the Interest Only term.
- While I don’t work with budgets as they tend to look back and not forward, you need to understand where your hard-earned is going. Print off six months of bank statements, grab a handful of highlighters and mark off essential and not so essential costs
- Shop from your pantry first, this will cut down your grocery bill and decrease waste
- NOTE: 1. Do Not change your big personal insurances without the support of a financial advisor
- 2. If you have debt, you do not have savings