There’s a lot of information circulating about how to protect yourself from coronavirus, but not many people are telling you what to do with your money – or, in some cases, what you have left.
There is no crystal ball that can predict exactly how much havoc COVID-19 will wreak on the planet. One thing’s for sure, the global economy is staggering and, while governments the world over are doing what they can to stem to tide, there’s a chance things could get a whole lot worse.
But one thing most financial experts agree on is that there may still be some things you can do to protect what you have, and possibly prepare for a turn for the worse.
Dig in for tough times
Avoid big expenses: Put off buying big-ticket items such as cars, houses, expensive holidays or other major purchases.
Spend less: Monitor where your money is going and try to eliminate unnecessary spending.
Increase savings: Minimise your stress in these difficult times by having a buffer. If you can, build your savings by finding places where it will earn the most interest. It may be time to investigate neobanks.
Destroy debt: Interest rates being what they are, there has never been a better time to wipe off debt.
Create new income: If there is any way you can earn an extra dollar or two, put your head to it. Think handyman or gardening work, or homemade/DIY work or goods, such as pickling, or selling homemade or vintage items online. Obviously, any online work (training/consulting/accounting, etc) could be advantageous if you want to avoid unnecessary exposure to the public. For ideas and inspiration (training.com.au)
“In short, lean and mean is the way to approach an economic downturn,” says MoneyTalks. “The more cash you have, the more options you have.”
Protect your savings
If you’re not yet retired and have a few good working years left in you, don’t panic. Yes, you’ve had a loss, but there may still be time to recoup those losses. Or some of them. Stocks are on sale right now and may become even cheaper. Talk to your financial adviser for the next steps.
If you have cash sitting outside of shares, keep it there. No-one really knows what’s going to happen and, some say, cash may be the safest way to keep your funds – for now.
Some of you may be feeling this worse than others. That maybe because you are heavily invested in the share market. It may also be too late to move your money. And already low-interest rates could potentially go even lower. The number one rule of investing is that you only crystallise a loss when you sell. While few could have predicted how rapidly the market turned, there are still some lessons to be learnt from this situation.
Protect your interests
“Anytime there’s a crisis, there’s a thief trying to capitalise on it,” says MoneyTalks.
Scammers abound, trying to take you while you’re at your most vulnerable. They’ll try to bait you with promises of returns, ways to make money, investment strategies and more. Our advice: don’t click anything unless you know the source, intimately.
There is no cure and there are no vaccinations. Unfortunately, they aren’t even close – not yet.
If an organisation approaches you for donations, double check, then check the source again. If they ask for gift cards, cash or by wiring money, ignore them.
The government is announcing updates to stimulus packages daily, so there may be more help ahead. Keep an eye on your inbox for updates.
What are you doing to protect your savings?
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