Make a to-do list for a DIY financial makeover
Hemotionally than economist forecasts.
It is worth remembering that there are no forecast scenarios that actually look good — just degrees of bad.
Does a successful recovery equate to more optimistic unemployment forecasts by the NZIER (at 8.1 per cent) — and Treasury (8.3 per cent)?
That’s still a near doubling of unemployment from 4 per cent at the start of the year.
That’s an extra 110,000 or more people who have lost their jobs.
And another 1 or 2 per cent above that won’t seem marginal to the 20,000 to 50,000 extra unemployed people it will represent.
When you put it in human terms, the finer details of what the Government does to mitigate the economic pain from here will be crucial.
So we should expect to see more political pressure going on in coming days and weeks.
It already seems unlikely that the Prime Minister can hold the line on staying at level 2 until June 22.
With the success of the viruselimination campaign continuing to surpass expectations, calls are mounting to open the borders — not just from business groups but from sometime political allies like Auckland Mayor Phil Goff and Deputy Prime Minister Winston Peters.
Who knows, perhaps the Opposition will also get organised enough this week to add some weight to the debate.
If daily case numbers continue to track at zero it would not be surprising to see a quicker move signalled after the June 8 Cabinet meeting.
Progress on the transtasman bubble is also likely to be accelerated in the weeks ahead.
The Government has proved adept, right through this crisis, at shifting policy as either the facts change or public opinion swings — or both.
New Zealand still has a good shot at surprising on the upside of recovery forecasts.
But we shouldn’t be looking across the Tasman as if this is some sort of sporting rivalry.
In fact, the better Australia’s economy performs, the better things are likely to go for New Zealand.
The country is still our second biggest export market and our largest two-way trading partner.
We should hope it does recover faster than us and in doing so gives us an extra lift.
Meanwhile, New Zealand should play its own game and focus on the best choices for our own small but unique part of the world.
What’s your view? letters@hos.co.nz
Diana Clement
It’s time to sort your finances out. You’re not human if there’s something somewhere in your financial life that isn’t 100 per cent up to date and/or sorted.
Many of us still have dollops of extra time in level 2, and if your finances still look like spaghetti or your head is deep in a hole, it’s time to get stuck into a DIY financial makeover.
It’s especially important for anyone on less than full income and those who face an uncertain financial future from the ongoing economic fallout of Covid-19.
But how? Start by taking a stocktake of what’s working and what is tangled and tortuous about your finances?
Next, list the top 10 tasks to take on. These could be things like a deep analysis of your spending, refinancing your mortgage, writing a will, switching insurance or creating a budget.
Employed people on low incomes and those on wage subsidies should create a task to look into any supplementary benefits, Working for Families, Best Start, in-work tax credits and others.
I think sorting/organising/filing real and digital paperwork should be on everyone’s top 10. It makes all the other tasks easier.
Next take your list of 10 and order them from most difficult to easiest. Then start working from the easiest task. That way you get some early wins that motivate you to keep it up. Putting the most difficult first could result in failure.
Having said that, easiest to hardest is not the only way. It could be according to the greatest or fastest financial payback.
On the subject of payback, the big bad budget offers one of the best returns on investment for many people. It’s a rare household that can’t save by setting spending limits in various aspects of their lives.
A big one is food. Lockdown directed much of our food spending on the supermarket, which helped concentrate the mind on what we really needed. Thanks to lockdown I’ve started analysing my “eating out” spend, including coffees, lunches and so on, in two ways: overall food spending and overall entertainment spending. Previously it was under entertainment only.
I’ve said it before, but selling excess stuff on Trade Me and other market places can bring in a good chunk of cash if you’re organised, which makes it a good task to include for some people. Trade Me’s parcel service using CourierPost and Fastway is reasonably easy to use, as is the Pass the Parcel service.
Whatever you choose to put on your to-do list, don’t tick it off too fast. If you break your tasks down into bite-sized actions and work through them methodically, the outcome is almost always better because you’ve had the time to think and work through each one thoroughly.
I don’t mean slow to the point of falling asleep on the job. Alongside your detailed to-do list, include dates to begin each step, and review your progress at the end of each week. Some of these jobs can seem overwhelming when you first start them. If you keep up small steps, you will make progress.
Slowly and methodically also allows for working through the pros and cons. We hear all too often that re-mortgaging or switching insurance are sure-fire wins. They may not be for you once you’ve analysed them.
You may, for example, get a cheaper interest rate on your mortgage, but less flexibility. A flexible mortgage enables you to pay your mortgage faster if you get bonuses or small but regular extra money. Switching mortgage could also mean higher bank fees.
A final note. Be especially careful when switching insurance providers or policies. Sometimes a “cheaper” policy is simply less cover. With any policies related to your health such as mortgage/ income protection and critical illness/disability policies you will usually not be covered for conditions developed during the time you held the old policy.
That includes conditions that haven’t been diagnosed, but you have symptoms for.