28/08/2020Money, Lifestyle

Navigating Your Finances in Challenging Times

The first thing to do in a crisis is determine what you can control, and what you can’t control. The second thing, focus on what you can control. Here are your 5 steps to stay in control, through this time.

The current financial crisis isn’t anything new for us (assuming you’re older than 12). Financial and economic downs have been around for a long time. Remember the GFC in 2008, the Tech Wreck in 2000, the 1991 recession and the 1987 market crash?

Market falls and financial crises happen regularly.

Everyone needs a ‘Plan B’, we need to be prepared for the falls.

The first thing to do in a crisis is determine what you can control, and what you can’t control. The second thing, focus on what you can control. Here are your 5 steps to stay in control, through this time.

1. Get comfortable with being uncomfortable

There’s nothing about job uncertainty, falling super balances and restrictions on our daily living that makes us comfortable. Learn to embrace that horrible feeling of discomfort and uncertainty - you’ll be amazed at what you can actually achieve.

To improve yourself, your situation, change and smash your goals, you have to get comfortable being uncomfortable.

2. Create Space before Making Decisions about your Money

We can’t make good financial decisions from a place of panic, anxiety or stress. Give yourself space and time before making decisions.

Talk with a trusted friend or adviser who aren’t emotionally invested in your decision as they will see alternative options that may be in your blind-spot.

People lose more money from their financial decision, than they do from any market correction or crisis. Our financial decisions are SO important so give them the time, space and thought they deserve.

3. Accept the situation you're in, and know, in time, your finances can improve

Be kind to yourself and avoid self-defeating thinking like "Things are never going to get better", “I’ll never get out of debt”, “I don’t earn enough money to get ahead, why bother”, “money is stressful”. These negative thoughts seep into your subconscious and will hold you back financially.

4. Make a Plan for the Result You Want

An effective way to solve a problem is to write the result you want, then work backwards to find the best solution for that result. For example, instead of trying to work out how you are going to afford to retire, begin by working out what you want for yourself in, say, 15 years’ time.

If you want to end up there, based on your current super balance and long-term returns, use a calculator to work out how much you need to save and invest this year, this month, this week, to get you there within 15 years.

Once the goal has been defined, the problem is halfway to being solved. Always begin with where you want to end up.

5. Your Tomorrow-self is as Important as your Today You

Don't make long term decisions based on your short term circumstances. Think long-term, big picture while taking small but significant steps. Take one small step. What happens when we take a step? We are now standing in a new position with a new perspective.

For example, if you are stressed or overwhelmed by debts or financial contracts - negotiate payment terms. Go onto the call with the attitude they value you as a customer and don’t want to lose you. They will help you work it out. That’s one step. Then you can make the next decision from a new space and perspective.

Do one thing. Get your foothold. Check in. Determine your next step, with your end result in mind.

The only reasonable assumption we can make about the COVID-19 crisis is, it will end. Whilst it may seem dire now, it will pass. They always do.

Focus on what you can control, step-by-step.

About the author: Karen Eley started Women Talking Finance because she wanted to create a business that catered for women just like her, who want to be their best financial selves. After working in the male-dominated finance sector for over 20 years, Karen no longer feels restricted by having to do things the traditional way. Her goal is to empower women.

Share this article


All information provided in the magazine is sourced from independent writers & may contain general advice that is not endorsed by the FairVine Super Plan.