With the impact of COVID probably still weighing heavily on your shoulders (and your wallet) – especially for those living south of the border – you’ve likely had to make some tough choices when it comes to your budget. What to keep, what to lose, as well as trying to contend with what’s available to you in terms of relief and the changing nature of that too. It’s a lot to handle without feeling a bit like you’re losing the plot in the process.
Financial recovery isn’t just a matter of waiting for the worst to pass, you have to stay active in your engagement with your finances, making sure to be realistic (without being defeatist) as well as taking responsibility for the decisions you do make (or choose not to make).
Sound complicated? It can be when you try to tackle financial recovery all at once, so let’s break it down a little with some quick tips to get you started.
Check your regular payments
No, this isn’t about your Netflix or Stan account (especially if you’re stuck inside that counts as an essential, doesn’t it?). This is about all the things you might think of as being unchangeable that might actually have some wiggle room. Request a credit card rate reduction to make sure you’re not accumulating debt where you don’t need to. Watch your electricity bill, there’s no better time to go a little green and make sure you’re only using what you need – shop around for better energy deals if you can. Sign up for automatic debt repayment plans to make sure you aren’t forking out an extra $40 in late payment fees every time you miss a date on the calendar. Check any subscriptions you might have coming out that you could probably live without, at least until you’re back on your feet. And one more thing…
Financial recovery means practicing financial self-protection
Staying 1.5 metres apart, washing your hands frequently and wearing masks are important ways to take care of yourself in COVID times, but it’s important not to let that be the only self-protection regime you’re keeping up with.
Financial issues are known to be one of the top causes of stress and anxiety for Australians. If the thought of your finances gets your fight or flight response kicking in, please know, it’s not just you.
In addition to the physiological symptoms such as anxiety, panic, heartburn and insomnia, the more usual psychological responses to financial stress are three fold;
- Ignoring the situation and ‘hoping’ it gets better – A lot of people (and business owners too) tend to have a kind of bank account object permanence problem – if they don’t look at their numbers, they can’t hurt them, right? Wrong. Unfortunately, it can be the act of not looking at a problem which turns a small financial issue into a debt that could hang over one for years – not to mention the impact it can have on one’s psyche. If this sounds like you, take a deep breath, grab your bank statements (or look online), work out what’s coming in, what you’re actually spending and what’s left (and what can be let go of). If it’s really too confronting to do on your own, maybe ask a trusted friend or family member to help. Getting a good grip on your finances can be on of the most freeing moments you can have. The best way to do it is to start now.
- Being frozen and unable to take any action – if that’s you, and you’re just unable to make a call or go to the bank, ask for help from a friend or relative. Get them to talk through with you what needs to be done and then, once they initiate any calls that need to be made, the financial institution will ask to speak to you to confirm your details and that will start the ball rolling. If you can’t continue the call, your friend/relative can make enquiries on your behalf. Then you can decide what to do from there and your ‘proxy’ can carry out your instructions.
- Becoming overtly analytical – whilst sitting down and working out a way forward when times are tough is a good idea – if it becomes a frequent occurrence, it might herald deeper issues. A friend of mine, had a difficult childhood, was exposed to intergenerational financial stress. She told me that for decades in her diaries and journals, there were pages and pages of financial workings in the margins as she tried to get her finances sorted – at least in her own head. Truth be told they weren’t terrible, she was just constantly terrified of not (ever) having enough. If that’s you, talking your financials through with a trusted advisor, like your accountant, might help show you what you’ve really been able to build, what your safety ‘number’ really is and find ways to ensure you can make the most of the money you do have.
The key to all of these in the short term, and financial recovery in the longer term, is to keep on top of the situation, engage with it and ask for help when you need it.
Connecting where it counts
As you start to make sense of your new financial normal, whatever that is, you might realise that sometimes change, even scary change, can have a silver lining. Think about all the ways you’ve learnt to be more self-sufficient during these times, going out less and cooking more, finding creative ways to keep busy and recognising the importance of your own mental health. Not going out or relying on expensive activities to keep you and your loved ones entertained has likely helped remind you of how to connect a little more authentically with the people around you – even if it’s only by FaceTime – without breaking the bank.
If you’d like help planning your business recovery or making sure you’re accessing all the opportunities to minimise your tax and get a better return to aid your financial recovery, we’d be delighted to help. You can call us on 02 6023 1700 or drop us a note via the form below.
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If you've got financial or business questions, or you just want to run something by us, we'd be delighted to really talk to you – in person, over the phone - call us on 02 6023 1700 - or you can use the form below and we'll get back to you.
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