Preparing for quarantine or loss of income

It’s a wild time at the moment and there are many workers concerned about how their income will be affected – whether you’re a casual or shift worker or you work in a high risk industry. Here’s where you need to be focusing your energy to be best prepared for what’s to come – have a listen to the my millennial money episode where I talk about this more:

Stop all extra debt repayments

This applies to credit cards, personal loans, mortgage payments, HECS/HELP debt, extra on bills (if you’re paying to get ahead on them), extra superannuation payments, car loans, tax bills. We need to free up some cash so direct these extra repayments to daily necessities.

Set payments to minimum

Check in on all your relevant ongoing debts and look for the minimum payment amount – set your payments to that. Call up your lenders where relevant and see if they’re providing any support to people they lend with and make the most of those. We’re trying to free up cash flow so set these payments to minimum.

Don't cancel your insurances

I’m referring to life insurance, income protection, total and permanent disability (TPD) insurance and trauma insurance. This also includes car insurance. These are our financial foundations!! You should look at cancelling things like your gym memberships (or insert your own luxury here!) before insurance!!!

Adjust expenses where possible

Can you make adjustments to your insurances like health insurance or car insurances to cut some costs but still provide necessary cover? See if there are better deals on your expenses that still provide you with what you need – look at things like phone bills, general insurances, utilities providers and the internet. Can you move your income protection to super for now, to help with cash flow? Speak to your adviser today.

Cut non-essential costs

Now is the time to cut back on the luxury items in your expenses. Look at cutting back movie/tv show streaming services, music streaming services, random online subscriptions and magazine subscriptions to a minimal amount. We need to prioritise essential costs. If you have two streaming apps for movies like Netflix or Stan, for example, just pick one for now.

Prioritise food, accomodation, essential utilities and transportation

You need to prioritise the basic items needed to live – food, somewhere to live, your electricity/gas/water/Internet (so you can work if you need to) and transportation. This is where your cash needs to be going, so stay focused on these needs (note I said ‘needs’, not ‘wants’). If you’re still saving, don’t do so at the expense of paying important things like rent, your mortgage or utilities bills.

Keep your emergency fund where it is

Don’t run off and invest this in shares right now – your emergency fund should be left exactly for that – emergencies. Don’t get over excited and spend this cash on non-essential investing right now.