How To Give Your Finances A Health Check

As we fight to contain COVID-19’s, it’s not only the physical health of New Zealanders that is under threat. With livelihoods on the line, it’s important we all give our finances a health check, too.

Physical wellbeing and financial health – during these uncertain times, the two go hand-in-hand. As we bunker down to protect the nation’s health, the resilience of individual, national and global finances are also a major concern.

The government and the Reserve Bank have launched unprecedented stimulus packages to protect Kiwi jobs, but given the extent of the restrictions we must operate under over the next few weeks, personal financial contingency planning is a must. If you do your homework and put plans in place, then facing an unknown future becomes a lot less daunting.

Create a budget

The first step of any financial plan is to create a budget. Sources of income are easy to identify … outgoings less so. Go back over a few months’ bank and credit card statements and highlight your outgoings on essentials and non-essentials. Putting an exact figure on the amount of money you’re wasting on frivolous, impulse purchases can often be an eye-opener, and all the impetus you need to cut back excessive spending. For further information on how to put together a household budget, check out our story: How To Write A Budget: Tips To Get Started.

Review your insurance and utility providers

When was the last time you reviewed your insurance policies or your contracts with your electricity, phone and broadband and other utility providers. When we’ve a lot on our plates, it’s far too easy to set up direct debits and then forget about them. But re-evaluating your contracts could save you money. Do you need such small excesses on your insurance? Are there better power and broadband deals out there? Once they’ve signed you up, some companies can be remiss about informing you if they introduce new cheaper plans. For more information about shopping around for better insurance, check out our story Don’t Set And Forget Your Home Insurance, and check out our Electricity, Broadband and Mobile Provider ratings.

redundancy insurance may be your saviour

Consolidate loans

If you’ve a number of small debts, consider consolidating them into one easy-to-manage sum. As well as streamlining your repayments, you might also be able to secure a lower interest rate. Secured personal loans are a good option if you’ve a valuable asset, such as a house or car, to offer as security, as they generally come with lower interest rates. Whereas low-rate credit cards can be a more flexible option, especially when used with a balance transfer. For more information, read our story How To Consolidate Your Debt, and compare credit cards and personal loans for free with Canstar.

Compare personal loans with Canstar!

Talk to your mortgage provider

Once you’ve managed your day-to-day expenses, if you can foresee that you are going to have difficulty paying your rent or mortgage, it’s worth having that discussion with your landlord or loan provider sooner rather than later.

The New Zealand Bankers Association is encouraging those financially affected by COVID-19 to talk to their banks. Potential measures to help bank customers through these difficult times include:

  • Reducing or suspending principal payments on loans and temporarily moving to interest-only repayments
  • Consolidating loans to help make repayments more manageable
  • Referring individual customers to budgeting services.

Consider a KiwiSaver hardship withdrawl

Given the precipitous and ongoing slump in global stock markets, most KiwiSaver members’ balances are taking a hit at the moment. But if you are in significant financial hardship, you still may want to consider withdrawing some of your KiwiSaver funds to help pay for essentials. The process isn’t easy – as we outline in our story Strict Evidence Requirements For Kiwisaver Hardship Withdrawals – but if you are in dire need of assistance, it can provide a financial lifeline.

Check your options: Work and Income

Whether you’re self-employed, a freelancer, an employee or employer, we are all in this together. And, thankfully, we’ve a government that, to an extent, has our backs. Along with benefit increases, there are wage subsidies available for employers, leave payments for those having to stop working to self-isolate, emergency payments for essentials, such as food and accommodation, as well as stress counselling. Details of all of this support can be found on Work and Income’s website.

The main thing to remember is that, whatever your financial circumstances, there is support available … all you need to do is get organised, and reach out and ask for help.

Sign up to receive more insights like this straight to your inbox.

By subscribing you agree to the Canstar Privacy Policy

Share this article