Navigating your finances through COVID-19
COVID-19 | LOCAL PROFESSIONAL ADVICE
Well it has been a huge couple of months for many Australian industries, and the finance and banking sector has been no different. Bank and non-Bank lending policies are changing daily which makes attaining finance for business and consumers easier for some, and harder for others.
Through unprecedented stimulus, easing of monetary policy, and provision of cheap money, the government is sending a clear message to lenders – keep lending. The intention of this is twofold – prop up business cashflow until the effects of COVID-19 ease, and make sure the banking industry is strong on the other side to support what will be much needed growth.
RELEVANT INDUSTRY NEWS
RBA - After two rate reductions in March, the Reserve Bank of Australia (RBA) announced its April decision last week and left Australia's official cash rate unchanged at its current record low of 0.25%. Considering recent government measures, it appears to be a wait and see approach from the RBA on rates for the time being.
Property - No “Freefall” of Australian house prices - An opinion from Realestate.com.au indicates that the current crisis is much different to what Australia faced in 2008-09 during the GFC. Read the full article here.
Support - As a result of the COVID-19 crisis, there are a number of resources available to support Business and Employees. We have put together a substantial (not exhaustive) list of resources which may be useful depending on your individual circumstances: Helping Business and Employees through COVID-19.
Scenario – Karen and Michael have been affected financially by the COVID-19 crisis and are weighing up their options regarding financial relief. Karen’s casual hospitality work has been put on hold while Michael’s work has remained the same as a health worker.
With most banks currently offering a pause or reduction of mortgage payments for affected Australians, Karen and Michael are now considering options for their $400k mortgage. As summarised below, the option they choose today would produce different outcomes when looking ahead 6 months.
Of course, Karen and Michael may have other options such as refinancing to a cheaper rate on their current mortgage. Potential monthly savings of $220, annual savings of $2,640, or $13,200 over the next 5 years.
Now is a great time to take stock, review, and adjust your budget. Manage your spending now and you’ll be in a much better place on the other side of this crisis.
Got extra time on your hands? Well don’t waste it. Consider some home improvements to boost the value of your property. Here are some tips on how to stretch your bathroom renovation budget, without breaking it.
Ed McNally is a Finance Consultant at Resolve Now Financial Solutions
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