Take control of your FINANCES

FIVE TIPS TO MINIMISE THE IMPACT OF COVID-19 ON YOUR FINANCES

The financial impact of the lockdown will be with us long after it is lifted and requires us to think and act differently regarding our finances. Old Mutual has this sound advice to help you on your way.

Get a financial coach

Planning your financial future can be daunting, which is why partnering with a coach is a good idea. The coach – also known as a financial adviser – can help you make sense of your circumstances, identify opportunities for improvement and suggest practical steps to achieve your long-term financial goals. During challenging times, the coach can provide insight into what the best course of action for your specific needs are.

Beware of the debt trap and use credit wisely

If you are struggling with debt, be wary of buying more things and applying for new credit or loans. Pay off your most expensive debt first, the ones with the highest interest rate. Contact your bank and other providers if your income has been reduced and you are unable to make your usual repayments. Get your free annual credit report from Old Mutual Rewards to see what is says and inform any necessary actions you need to take.

Time for bold actions

If your budget shows you are overspending, be prepared to cut costs. Use a budgeting app like 22SEVEN which links all your accounts in one place and makes it easier to identify ways you can save. The lockdown has helped with “getting back to basics”, identifying areas where you previously thought you weren’t able to save. For instance, your entertainment budget has probably decreased significantly. Use this money to pay off your debt quicker or direct it to your emergency savings fund.

Review your investment and retirement plan

The recent volatile financial market has had a severe impact on most investment portfolios. Your circumstances will determine the appropriate action you should take now to realign your portfolio with your plans. Stick to your plan, don’t try to time the market and invest with a partner who has experience in different market conditions.

Stay calm and stay protected

Covid-19 has reminded us about the uncertainty of tomorrow. It is important to review your risk cover and financial plan to make sure your loved ones are taken care of if you are no longer around. If you are a business owner, plan for contingencies to ensure that those who rely on your business for an income will still be able to receive it. Consult your financial adviser and make informed decisions without compromising your long-term financial plans.