How to make sure you’re in good financial shape for COVID-19

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Even if you’re secure in your job and financially unaffected by Covid19, the economic fallout could last for years. The stronger your financial position is now and the lower your costs are, the more likely you’ll come out the other end thriving. 

That’s why the first thing you should do is take a close look at your costs and think about which ones you can reduce – and you might as well do it now while you’ve got all this time on your hands!

Sorting out your debt

If you’ve got lots of separate debts or debt with high interest rates, consolidating it into one loan might be a good idea. It could help reduce your interest payments and decrease the amount of your monthly repayments.

On the other hand, refinancing your mortgage could give you a bit of room to breathe and extra funds in the budget. Interest rates are at record lows right now and if you fixed a few years ago, dropping to a lower rate could mean big savings. Extending your repayment period or adding a redraw facility could also help free up cash and give you a financial safety net in case your employment situation changes. 

Having the right level of insurance

Now is the perfect time to take a look at your personal insurance and make sure your covers are still relevant. It’s pretty common for Kiwis to have an insurance policy in place for several years without it ever being reviewed. Life changes such as purchasing a house, paying down debt, having a baby or change in occupation all warrant a closer look at your insurances to make sure your policy still fits your needs.

Consider calculating your contents too – we tend to accumulate more and more over the years, so our sum insured levels for our contents should be reviewed regularly. 

Cutting costs 

In these crazy times, every little bit counts so it’s worth seeing if you can shave anything off your fixed costs, like gas, electricity, internet and rent. 

Consider switching to cheaper plans or more affordable providers. And since you’re at home all the time, you can probably save a little money buying a cheaper mobile phone plan with less data. It may also be worth giving your providers a call and see if you can secure any discounts, particularly if they’re advertising discounts for new customers right now. 

The last month has been a crazy time for everyone in New Zealand and the world. With everything that’s going on, it can be easy to forget that a regular review is key to managing your finances. That’s why now is the perfect time to sit down and make sure you’re in the best possible position financially for whatever happens. 

To help make sorting your finances easier, Money Empire is still offering free remote financial advice services. Our expert financial advisers can help set your budget, cut costs, make a plan in case you lose your job, consolidate your debt, restructure or refinance your mortgage, sort out your insurance and more. Get in touch any time – we’re here to help

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