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The coronavirus pandemic has thrown Australia, particularly Melbourne, into a frenzy.
A recent report from Members Equity Bank (ME Bank), has found that even though this has clearly been a harrowing period for many, in reality, ‘Australians’ financial comfort reached a near-record high despite the pandemic’.
At first glance this sounds positive, but after delving deeper into the report, there are a few clear points that resonated with the conversations myself and the team have been having with our clients (who are primarily Victorian). These include:
- The fear of a weak future labour market has lead to decreased spending
- There is greater uncertainty of what the future looks like for many
- Government stimulus has helped boost the financial resilience of Australian households (for now)
- For the first time since 2014, more households are spending less than they earned
- Only 32% of families believe they could last longer than 3 months based on their current spending savings
- 39% of part time workers are looking for increased hours – a 30% increase on six months ago
- 34% of households believe they will be worse off due to the pandemic, compared to 20% of households who believe they will be better off
So, now that we have seen those stats, there are some steps you can take to help minimise the COVID impact.
Get a detailed understanding of your financial situation
- Assets and debts
- Your cash flow – both incoming and outgoing
- Review all your direct debits and cull the ones that don’t bring you joy!
Set aside a clear buffer that is only for a rainy day. Three months of expenses is a good starting point, and if you don’t have this safety net, it’s never too late to start putting some away each pay cycle until you get there.
- Be aware of what you are eligible for if things deteriorate with your employment or financial circumstances – some examples are mortgage holidays and government stimulus
- Start some goal planning – having some positive things to work towards is important.
In the interim, I would love to hear from you with an answer to these two questions:
- What will be the long-term financial benefits of this pandemic for you?
- What is your biggest financial learning been from the last six months?
Let me know your thoughts at email@example.com