MenuRecognising the financial uncertainty that COVID-19 has caused in the lives of many Australians, the Financial Planning Association of Australia (FPA) has released a free guide Financial planning in uncertain times to help consumers manage their finances during the crisis.
The guide equips Australians with valuable tips and advice from the global community of CFP® professionals to action themselves and encourages them to seek help of a financial planner to plan their life on the other side of this pandemic.
Dante De Gori CFP®, CEO of the FPA said: “The financial impact of COVID-19 is deeper than it currently appears. While Australia might be reopening for business soon, lost income and household debt means consumers are not going to rush into their pre-COVID spending right away.
“Keeping in mind that the crisis is not over yet, it’s important for all Australians to continue to plan their finances prudently, and tread cautiously before they feel 100% confident of the economic situation, as well as the state of their own personal finances,” he added.
Managing cash flow as priority
As a first step, consumers must assess their current financial situation including balances on their savings accounts, debt obligations and identify cost-saving opportunities where appropriate.
“There isn’t a lot you can control right now, but one area you can control is your cash flow,” Mr De Gori explained.
“Can you temporarily scale back your monthly mobile phone plan? Can you save on one or more utilities by switching providers? Challenge yourself to see how much monthly cash flow you can free up among your regular expenses.”
This includes cutting back on all non-essentials such as convenience items, takeaway meals, luxury goods and other discretionary expenses, as well as forgotten direct debits and monthly subscriptions.
If you are still struggling to pay your bills, he recommends consumers to contact their lenders immediately explaining their financial situation and explore the options available to them.
Review additional income opportunities
The FPA guide inspires consumers to join the gig economy bandwagon for some additional income opportunities – such as freelancing or consulting on the side.
Additionally, selling unwanted items around the house e.g. articles of clothing, mobile phones, old consoles, etc. can also add a few extra dollars to their income.
Beware of scams
Mr De Gori cautions Australians against emails, texts or social media posts that could be selling fake products or information related to COVID-19. He warns against providing any personal or sensitive information by phone or text, especially if you did not initiate the contact.
“When you’re rushing to secure your finances amid a full-blown crisis, you might be more susceptible to falling victim, he said.
“Scammers are always looking for opportunities to take advantage of the vulnerable, which makes seniors especially susceptible to financial exploitation at this time.”
Don’t lose sight of the future
The FPA encourages Australians to revisit their financial plan with an FPA member financial planner, or if they don’t have a plan, to engage a financial planner to create one for them.
The current pandemic is a harsh reminder for everyone to have a financial plan in place, not only as a road map to achieve their goals, but also for contingency strategies for unforeseen events such as the one we’re experiencing now.
“There is life outside of and beyond the current situation. Take this time to plan, plan, plan,” Mr De Gori urged.
“Even amid the virus-related restrictions in place, there are many financial professionals available for virtual or phone conversations to help you get to the other side.
“Know that if you should need assistance – whether now or on the other side of this – there are 5,700 CFP® professionals in Australia committed to delivering competent and ethical financial advice so that all Australians can get back on their feet financially,” concluded Mr De Gori.
To read the full guide visit Financial planning in uncertain times and access the FPA’s Match My Planner service to connect with a CFP® professional.
