Keeping Your Head Above Water

No one’s sure when the effects of the global credit crisis will be over, but most of us have been affected. The important thing is to survive the downturn in order to enjoy better times in the future. No matter how modest or large our assets and savings are, none of us want to lose what we have worked hard for and put aside for later on.

The ‘losses on the Board’ for most of us range from a decrease in the of value in our Super, and lower property values through to some people losing their homes, jobs and business. The important things to consider now are securing what we have, keeping money coming in, and not getting lured into parting with more money in risky ventures. Stimulus packages from the Government can’t be relied on, though they have certainly helped.

We have independently chosen to review information and literature available from ‘Fido’, the Government website providing financial tips and safety checks on money matters, a bit like a ‘watchdog’, hence the name. Follow the link to Fido at the end of this article to get more details on the points and excerpts below.

Making the Most of your Money

Most budget counsellors and financial planners suggest above everything else that people set up a budget and financial plan, no matter how simple, to manage your money and achieve some goals important to you. This advice is given whether in good times or bad, such as we are experiencing today.

It may be easier to save if you have something to work towards, like paying off a credit card or personal loan, paying your mortgage off more quickly to be financially independent sooner, taking a holiday, or buying something you’ve had your eye on.

The ‘fido’ website provides some great tools to get you started, from a simple table to plan your goals, through to a budget planner for easy use. The following links will get you started:

http://fido.gov.au/fido/fido.nsf/byheadline/Planning+your+finances

Coping with big changes in your financial situation

There is no doubt, the global credit crisis has led to big financial changes for most of us, mainly in the wrong direction. Figures get thrown around by economists, but some people have reported to have lost ‘on paper’ up to 35% of their wealth, and for others this may be even more.

We all need some tips and hints on how what to do if we are in financial strife, how to make better decisions and avoid expensive mistakes.

Losing your job is a big fear at the moment is which will have an unavoidable impact on your finances. Depending on your circumstances, there are a lot of financial issues to consider such as:

• Will you receive a redundancy payout?

• What are your legal rights and entitlements?

• What are you current financial commitments?

• Where to from here?

You will need to get a handle on your exact financial position. Before making any decisions, taking any money or signing any documents, find out your entitlements and the best way for you to deal with any money you may receive. You may not be able to undo a decision you are unhappy about.
Contact Centrelink on 13 23 00 who conduct seminars on retrenchment and financial issues and can offer face-to-face interviews so you can find out about all of your options. Their information service can be found at:

http://www.centrelink.gov.au/internet/internet.nsf/services/fis.htm

Depending on your age and your employment options different financial issues will be a priority. Whatever your circumstances, you will probably need to review your budget, loans, credit cards and super.

If you can't pay your bills and pay back your loans?

Stay calm and work out what you can reasonably pay each person to whom you owe money (your 'creditors'), considering your living costs, rent or mortgage, and all your debts. Get assistance early on about making any changes to your loan repayments.

If you need more help with budgeting or financial problems, talk to a financial counsellor who can help you take control of your situation:

 

http://fido.gov.au/fido/fido.nsf/byHeadline/Financial+counselling
 

Contact your creditors promptly and tell them you are having financial difficulties and want to discuss repayment arrangements. This is especially important if creditors hold security over your home, car or other assets. Offer only what you can reasonably afford to pay, and offer something to each creditor. Try to cover interest or charges applying to the debt. Ask if the creditor will agree to reduce the interest on the debt until you can get back on your feet. Confirm any agreement in writing.

Getting financial advice

Personal financial advice can help especially at important turning points in your life, such as losing your job, investing in a business or property, retirement, finally paying off the mortgage, or having children. By following some practical guidelines, you can choose a good adviser and decide if their advice is right for you.

The Fido website provides a range of tips on getting advice ranging from where to find a licensed advisory business, choosing an advisor, and making sure the advice suits your needs:

http://fido.gov.au/fido/fido.nsf/byHeadline/Getting%20good%20advice

Link for this review

Follow this link to Fido, which is managed by the Australian Investments and Securities Commission, for more information and details on the source of this review.

http://fido.gov.au/fido/fido.nsf

We hope this article has been of interest to you. Please feel free to print a friendly copy or download the PDF article for your reference.

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Disclaimer: The information contained in this section should not be used for individual financial or professional advice. Please seek independent financial or professional advice if you have concerns or specific questions relating to your money and situation.