Combating bad debt in a pandemic.

Like many, Richard lost his employment due to the impacts of the COVID-19 pandemic on the NZ economy. 

With a young family, including a newborn, he can understand the financial pressures people now find themselves under.

Richard has always been passionate about helping others get out from underneath the constraints of personal debt, and now It’s just as important as ever to discuss money matters during the challenges of a pandemic and beyond. Putting together a robust plan to ensure you’re in the best possible financial position for the future is key. 

The fear of meeting face-to-face can often make this difficult, despite lockdown being lifted in NZ.

COVID-19 has provided many challenges to industries and has affected the incomes of many people. The future remains uncertain as we deal with the fallout from adapting to changes brought about by the pandemic, including rising unemployment.

“Not knowing where your next dollar is coming from is beyond stressful. It’s important to not let the fear set in, but focus on what you can control and the changes you can make to put yourself in a better position.” Says Richard. 

Richard wanted to find a way to reach people while in lockdown, while adapting his business to a new way in which people will seek financial advice in the future.

As a registered financial advisor, and head coach of his debt coaching business ‘Nuke Your Debt’, Richard knew adapting to this new environment meant pivoting more towards leveraging technology and video conferencing, whilst finding new ways to increase digital interactions and exposure with existing and potential clients.

“Sometimes, when you know you need help, it’s not often practical to simply pop into an office to speak with an advisor, especially those conscious of, or at risk of getting sick. I’m excited to be able to offer people the ability to discuss their finances from the comfort of home in their pyjama’s, in the car, or even waiting for the bus.” Richard says. 

By applying his experience in banking and finance, Richard knew he could make the greatest impact by helping people manage their finances during uncertain times.  

“Unemployment will be a problem for years to come, as household income is impacted, people will have to begin prioritising their spending. What might feel like a hard decision to make now, when making sacrifices with your spending, may just turn out to be a blessing in disguise”. Says Richard. 

It will be a tough time for many, however Richard is keen to help those who may find themselves in tough situations.

Richard believes free budgeting services offered by community groups are often a good place to start, unfortunately the advice can be limited. 

He aims to help people help themselves with household spending, establishing tailored and realistic financial goals, as they pass through life’s milestones.

Having a realistic budget and a clear understanding of where your money goes is critical, it’s also important to have a plan to pay down personal debt, knowing how to go about it is an issue faced by many, however Richard enjoys helping people navigate this challenge.

This is just one example of how a small business owner has had to find an effective strategy to adapt ways of working, in order for business to thrive and survive. 

Changes like these allow important and useful services to continue, to be available for their customers for now and the foreseeable future. It’s important for everyone to look internally to determine what changes can be implemented in order to protect and future-proof their businesses, livelihoods and personal financial positions during these unprecedented times. 

What to do when you loose your job.

COVID19 has caused a massive amount of economic carnage abroad, we would be naive to think this couldn’t be the case down under.

If you’ve unfortunately been a casualty and have lost a job or faced reduced hours, then there are some practical things you can do right now to minimise the damage.

With less money coming in, the simple fact of the matter is you will need to curb your spending.

As depressing as this may sound, you should see this as a positive. When we are faced with the need to reduce our spending, it forces us to look at what we value the most in our lives.

If you have not done a budget, or you have one, but haven’t paid much attention, now is the time.

5 important areas you need to consider are the following:

Money In – Income, wages, salary, what money is coming in, is there any part-time work you can do, is there working for families or spouse’s income you can rely on, what about Work and Income support ?

Money Out – What do you spend money on each week, fortnight or month? If tend to get paid on a specific pay cycle, try breaking your spending down to match your pay, followed by what that might look like over a week. For example, if you get paid fortnightly, multiply this over a year, then break it down to each week.

Surplus – This is the sweet spot you have left over after paying your bills. Surplus is what we use to save, or pay down debt. If you find you are constantly in the red each week with nothing left over, then we need to address your spending, you simply can not spend more than you earn. If you’re not sure, book an appointment with me and I’ll help you through this.

Debt – It’s super important to come to terms with what you owe. Perhaps you’ve got a slightly higher credit card balance than you would prefer, maybe you brought a car on finance recently.

Add up the total so you know what to pay back.

What you can sell – Take a look around the house, you’ll be surprised by how much you may be able to get for items you no longer use. Old sports equipment is a perfect place to start, use the proceeds to paying down debt or setup cash reserves for a rainy day.

There will be some tough calls to make, and you may need to sell things you would have loved to have kept, you may also have cut back on a few items as part of your weekly spend. Don’t despair, this as an opportunity to get rid of what you don’t need, and to focus on what’s most important to you.

Think about that skills & talents you have, everyone has something, how could you make an extra buck or two selling a skill, product or service ? You’ll have some extra time while exploring other income opportunities, so get your hustle on.

If you are needing help with a budget, or perhaps you need some coaching to get you started. Book a time with me today.