Were your finances ready for covid?

by Jodi Escudier                                                                                                                                                                                 

Erm…. Well ok, we did not see that one coming and neither did my wallet! Suddenly our brunching, hugging, Saturday shopping and dinner with friends world was turned upside down and along with it our finances. 

So, how has your money matters survived such an immense change?  Whether your income has stopped, reduced or stayed the same there are a few things all of us need to have in place to be able to survive any financial hiccup (this is temporary right?)  like a pro. 

1.  Emergency fund – if you have one, RIGHT NOW is the emergency you have been waiting for!  A nice pile of money waiting for you to exchange it for toilet roll, iso snacks and an upgrade in paid tv subscriptions.  This is the fund that is essential to preventing the complete panic of “will I be ok?” whether your income changed or not, an emergency fund is essential for financial support in uncertain times.  Start small – build up to what you are comfortable with, hold separately to your everyday account – sales are not emergencies.
2. Know your numbers – how much does it cost you to run your life per week, per month, per year???  Strip away the pedis and deconstructed…well….anything, and what is the figure you need per month to afford the BASICS of your life – food, utilities and rent?  Knowing where you are starting from means you can plan for where you are going.  Most people could name the Kardashian Kidz but can you tell me your annual expenses?
3. Stick to a spending plan – ok, ok it’s a budget but no one likes that word, so work with me here.   A good spending plan will have core and discretionary expenses covered, so you will know exactly what you can pause spending on to preserve your cash (hint – it’s the discretionary spending)  Only spend on your core expenses, limit your online shopping, and while we love to support local during hard times, going in for a $5 coffee and coming out with $14 “covid cookies”  $20 “covid succulent” and $50 “covid voucher” that you (probably) will never use, is serving everyone else first before yourself.  It’s beautiful to support others if you can, but looking after your own money first is essential. 

So there you have it – 3 practical tips to secure your finances now so that if anything completely unexpected and unplanned happens again (please, no) then you will have some peace of mind that you have an emergency fund to fall back on, be secure on what your figures are, and can spend according to your budget. Until we are back to our concert going, food truck eating, over-huggy selves, stay safe, save money.

Jodi Escudier is a financial adviser and owner of Sixpence Wealth Management.  Self confessed spreadsheet nerd and numbers gal Jodi started her finance career in London in 2003 and emigrated to Perth, WA in 2009 where she now lives with her husband, children and fur babies.  To find out how Jodi works with clients go to www.sixpencewealth.com.au and for more tips and money motivation follow her at @the.womens.wealth.coach. 

The information contained above is for general information purposes only and should not be taken as personal financial advice as no personal circumstances were considered in producing this article.  Please consult a qualified professional before making any financial decisions.