What does a recession mean?
Tips to navigate a recession.
For the first time in nine years, Australia has experienced a quarter of negative economic growth and is expected to fall into a recession if this trend continues.
This article provides some quick tips to help you navigate a recession.
Play smart and safe with your money
If your job has not been a casualty of COVID-19, or your income is being supplemented by the Government’s JobKeeper program, it’s time to be smarter with your money.
As Government supports start to be wound back in September, more businesses may have to consider layoffs or redundancies to survive.
If your job has been a casualty of COVID-19, it’s time to safeguard your money. Pare back your budget to the minimum you need to spend to ensure you have the basics covered and reach out to community and government resources for help. As restrictions start to ease, more roles will become available so keep an eye out and don’t become disheartened.
Regardless of your income, we can all take some simple steps to recession-proof our households.
Pay down debt
Create some breathing room in your budget by cutting down on expenses and look to use any extra funds to pay down debt.
Getting ahead on any debt obligations whilst you have an income can bring you some peace of mind and reduce the financial pressure if your circumstances change in the future.
Increase your emergency savings
Make increasing your safety net a priority so it can be used to afford the essentials if your income changes in the future.
Review your budget and spending
Start with your non-essential spending (e.g. luxury items, subscriptions etc.) to cut down where you can.
You can use the savings from this to pay down debt or put it towards your emergency fund.
Live within your means
If you are putting essential purchases on credit or it’s coming out of your ‘fun’ spending money, now is the most important time to reel it in.
If you’re lucky enough to still have a job and regular income, don’t take it for granted, use your money wisely and plan for the unexpected, just in case the unexpected happens.
Focus on the future
The path through and after COVID 19 is murky and it’s easy to make rash decisions in the face of uncertainty. Don’t make changes that jeopardise your long-term financial security, if it is not genuinely needed.
The information in this article has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in the document is general advice and does not take into account any person's particular investment objectives, financial situation or needs. Before acting on anything based on this advice you should consider its appropriateness to you, having regard to your objectives, financial situations and needs.