Updated: Jun 18, 2020
Financial advisor, Scott Norrish, returns to our screens to give us his advice on managing personal finances. Now more than ever, we need to understand how to manage them correctly, to ensure we can pay our bills right now, and look forward to a brighter future. Scott’s goal is to prevent finances from becoming an added stress in his customer’s lives, and as such, he has provided us with some effective financial strategies that we can put into place today.
Here are his suggestions and answers to all the common questions he’s hearing right now.
Back to Basics
· You need to be well informed about your financial situation and understand what is coming in and out.
· Banking institutions and moneysmart.gov.au offer great online tools.
· Financial advisors also provide tools like spreadsheets that fit your personal situation.
· It may seem impossible to organise and manage your finances right now. So, tell someone you’re going to do it, commit to it and find out ways you can go about it. Scott tells us to start by grabbing a pen and paper and writing down the biggest things first i.e. your mortgage payments, grocery spending, school fees.
· Emotions can impact your financial decision-making process. Use rational thought and try to resist impulses and rash decisions.
· Timeframe is key: what are the immediate issues? What is keeping you up at night? What are you looking to achieve? This can help you address the main issues in a logical way.
· $500-600 a fortnight.
· Will be supplemented by the coronavirus stimulus of $550.
· There are other add-ons and tax benefits, but payments may vary depending on your situation such as if you’re single, partnered or have independent children etc.
· The restrictions have been reduced – there is no requirement for proof of job or income of your partner. This will come into effect on 27th April.
· If you’re unsure whether it applies to you, talk to your accountant.
· You can find information regarding the JobKeeper Payment in Scott’s previous webinar and our Survive and Revive Blog.
Freezing Loan Repayments
· This is a good option as a short-term strategy.
· Talk to your bank and find out their terms.
· This works on compound interest, meaning it will cost you more in the long term.
· Weigh up your priorities for the long-term vs short-term. For example, if you’re struggling to put food on the table or pay your mortgage, this may be a helpful strategy. Whereas, if you have savings and can maintain payments, in the long term it will be cheaper to continue paying now.
Accessing Super Early
· Again, this calls for weighing up your financial priorities.
· Something to consider is that you can add to your super once your finances are stable again. Scott suggests putting money back as soon as you’re back on your feet to avoid a big hit at once.
· This can work tax effectively (out of your pay), or after-tax contributions (money out of your own pocket).
· Consider the timeframes, risks and fundamentals to your business.
· Look at where you are invested and whether your portfolio is allocated properly.
· Are you in it for the long term?
For any other finance related questions you may have, send them to firstname.lastname@example.org or connect with Scott Norrish directly on LinkedIn. To register for our upcoming webinars, follow the link below. https://www.thetravelindustryhub.com/survive-and-revive.