For many of us the current global economic situation is stressful and frightening. Is my job secure? Will my husband or partner lose his job? How will we pay the mortgage / feed the family? Will we lose the house? Thoughts such as these swirl around our heads, and have a nasty tendency to keep us awake at night.
So what positive actions can we take to improve our financial situation and reduce our worry? We look at a variety of steps you could take to feel more financially secure:
- The first priority is to reduce debt wherever possible. Pay off credit card debt and overdrafts as quickly as possible.
- Do not take on any more debt if you can possibly avoid it – this will just add to your stress levels, and lead to further hardship should you lose your job.
- As of today, start cutting expenditure wherever possible, set yourself a written household budget, and contribute a regular weekly amount to a savings account.
- Review your vehicle situation – can you sell you second car to reduce debt? Downsize your first car to a cheaper model? Get rid of the cars altogether and rely on public transport?
- If your household is reliant on one income, it might be wise to add a second one. Look for a part time or full time job to add to the family income, as this will reduce your risk considerably.
- If you have a mortgage, then it is time to examine your options. Can you pay it off more quickly? Should you sell your house and downsize, in order to reduce or eliminate your mortgage altogether? As a minimum, ensure that you have shopped around the NZ banks and are paying the lowest interest rate possible.
- It would also be wise to take a long, hard look at the company you work for and the industry that it is in. How risky is it? Are there other businesses laying people off in this sector? Are companies starting to fail or close their doors? If you have serious worries about the financial health of the company you work for, or the stability of the related industry, it might be time to look for another job.
Many of these changes will take time to effect – especially in this market, so start taking action sooner rather than later. The aim is to move to a position of greater financial security, and to minimize your financial risk as quickly as possible.