Managing your money during COVID-19
Fiji is a cosmopolitan country. With no tourists coming to our shores, hotel prices have crashed.
Unemployment and hardship are inevitable with the shutdown of Fiji’s number one foreign exchange earner – tourism.
A growing percentage of Fijians are out of work or have had their hours reduced due to the coronavirus pandemic.
Most hotels and businesses shutting their doors and Fijians are worried about their health safety and money amid the COVID-19 pandemic.
Emergency savings
Most Fijians are starting to rely on emergency savings to get through this period, you’ll want to be smart about how you spend that money. Here’s how financial advisors recommend you budget the money you have left if you lose your job during the pandemic.
1. Eliminate any expenses you don’t truly need
If you’re cash-strapped, the first thing you’ll want to do is take a hard look at how you spend your money.
The most impactful thing you can do is be ruthless with your discretionary expenses and quickly eliminate everything you can live without right now.
Make a list of everything you currently spend money on and circle the items that qualify as “wants.”
These could be subscriptions, take-out, clothes or electronics. Pause any recurring subscriptions and make an effort to cut back on online shopping.
After slashing those expenses, you should be down to your core budget for the most part.
Still, go over your revised list of expenses again, ‘Look for anything else you can live without right now, like your unlimited phone plan, en- tertainment or any other services.’
Choosing important items
These are items that might be important in normal life but could go in recessionary times.
Eliminating these expenses doesn’t have to be permanent, but could free up some much-needed cash in the meantime.
From there, you can determine your “bottom-line expense number.
That’s the leanest version of your typical budget.
It should consist of expenses like your rent or mortgage payment, food, insurance and utilities.
Look at how much money you have in your emergency fund or any other savings accounts and divide that by the new monthly expense number you just calculated.
That will give you an idea of how many months you can get by without an income.
2. Prioritise your remaining expenses
If you don’t have any money saved up or project, you’ll go through your emergency fund quickly, and have to start prioritising your needs. Food and housing should be your top priorities.
If you’re worried about making your housing payments because of the pandemic, start by contacting your lender if you’re a homeowner and your landlord if you’re a renter to discuss payment options.
All financial institutions are offering assistance and flexibility to homeowners and businesses.
Under this policy, payments can be reduced or suspended for up to six months.
When it comes to your food budget, stick to the essentials.
You can also follow this guide on what not to waste money on, including foods you normally don’t eat.
After prioritising food and housing, you’ll want to figure out the smartest way to tackle your other bills.
Again, start with a phone call: contact your utility company, internet provider and/or cell phone provider and ask if they’d be willing to waive late fees or can provide a payment plan with low interest.
It can’t hurt to ask.
3. Make minimum debt payments if you can
If you can afford to pay the minimum on your credit card balance, do it.
If you don’t, you may owe fees and extra interest, and your credit score could be negatively impacted.
If you absolutely cannot make payments at this time, contact your card issuer right away.
It sounds simple, but reaching out to your various providers — mortgage lenders, student loan providers or credit card companies — to review your options is essential. “You won’t know what’s available if you don’t ask,” Westlin says.
Cutting back on budget
As the coronavirus reaches our shores, some parts of Fiji has come to a halt: schools are closed, sports tournaments are suspended, events are cancelled.
Government has announced restrictions on restaurants, clubs and bars which is usually where we spend money.
Use that to your advantage to help cut back your budget to the essentials.
Some Fijians are already out of work and some could end up losing their jobs in a potential recession.