What Keeps You Awake over Your Finances COVID 19 Pandemic?

In these times that we are currently, we all have been suffering from a little sleep insomnia over our finances and stability.

We might have flattened the curve; the effects of the coronavirus outbreak are far from over.

Although restrictions are easing and everything from gyms, hotels, and restaurants to beauty salons are reopening and will pick up, many Australians are now experiencing return anxiety and thousands are experiencing financial distress.

According to the Australian Bureau of Statistics, employment rates have dropped by 7.3 per cent since the peak of the pandemic in March this year.

With restrictions on businesses causing hundreds of thousands of workers to either lose their job entirely or be faced with reduced hours until the crisis passes.

Job Losses and Uncertainty Keeping Us Awake and Causing Anxiety.

Families have been hit with job loss and uncertainty. The loss of one income or even both incomes in a usual two-income household where there are children and a mortgage will obviously cause financial strain and emotional stress.

It’s not just a matter of feeling like you need to make temporary inconvenient sacrifices, it’s the thought of:

‘What if this goes on longer?’

 ‘What if we lose the house?’.”

Marisa Broome, chair of the Financial Planning Association of Australia (FPA) agrees, noting that the health crisis of COVID-19 has become an economic crisis that has left many Australians feeling unprepared when it comes to their finances.

Everyone has been impacted one way or the other

If you’re close to retirement, you may be anxiously watching how your superannuation balance has been affected by volatile financial markets.

The shutdown of the economy due to COVID-19 has taken a toll on many businesses both large and small.

People have lost their jobs or are working fewer hours and a lot of borrowers are struggling to meet utility bills, home loan or rent payments.

The real financial impact of COVID-19 won’t be known for some time, no matter your current financial situation.

There are ways to safeguard your funds and come back stronger than ever.

What Women Think About Their Finances and What Is Keeping Them Awake.

“Group Discussion with Women – Their Thoughts”

We gathered a group of eight women who all have children, aged between 35 and 44, to discuss where money fits into their lives.

We discussed looking after their families as well as planning for their own personal futures and some interesting points emerged.

Firstly, they were all working overseas and travelling in their 20s and did not contribute money into super, therefore, they are now almost a decade behind.

They are very conscious that they don’t have enough.

In this age group with young children, these women are excellent at budgeting, so they know exactly what the cost of living is and whether they can actually save money.

This time in their life is one of the highest expenses with mortgages, school fees, day-care fees, rising utility bills and growing children.

As we know these attitudes have not changed since our Covid19.

Single Mothers and Their Attitudes Towards Their Finances.

One of the group identified was a single mother with a primary school age child who was working and studying at University.

She said that she has had to learn to be as strict with her time as she is with her money.

She said she knows that she is in this space until she finishes her degree and her income will increase with the first job after university.

This pathway is not the easiest however she is determined to make a better life for herself and her child.

Women Supporting Themselves after Age 65?

When I asked what their greatest concerns were, all the women were most concerned about supporting themselves after the age of 65.

We discussed that women are now living well into their 90s and will be in retirement longer than they were in the workforce.

These women are worried about not having enough money at that time in their life and living in poverty.

These attitudes have not changed since the Covid19 pandemic; however many have suspended study are concerned about keeping their head above water and this is keeping them awake over their finances.

Thinking about long term financial stability has been put on hold and is causing anxiety often leading to depression.

Contributing To Super?

As we know at the moment most people are drawing down some of their super to keep them afloat during these trying times until our economy makes a turnaround.

They were trying to work out how much money they needed to contribute to super, once the children were more established.

The conundrum was whether to put more money into super or pay down their mortgage.

Given that interest rates are now at record lows and mortgage repayments are far more affordable, they still have a large mortgage because of house prices.

Salary Sacrifice into Super?

One of the comments came about that if she put $20 a week a salary sacrifice into her super that would help.

I said that would add close to $1500 per annum including the government co- contribution into super.

If that $1500 goes in and compounds every year plus any employer contributions over the next 20 years she will slowly build up her super while paying down the mortgage.

Anxiety and Health Concerns

Other concerns centred around health and how to take care of themselves so that they don’t get run down looking after their family.

The topic of self-care is important because they have to set aside time to exercise, cost associated with any kind of gym membership, any kind of personal expenditure such as beauty money or haircare.

One woman commented on how women mentally multitask; they constantly think about everything in their life all at once and try to organise the various functions in checklists or to-do list.

Partners and Sharing the Work Load.

They also commented that their partners help with their share of the work involved, but don’t actually do the planning to get the work done, nor do they actually work out the budget for the house.

This constant mental activity can also be stressful because women feel as though it’s their job to get everything done.

We discussed the importance of a really good nutritious diet for themselves in the family and fitting in mental and emotional health activities for themselves.

Overthinking about “I can’t Afford Mentality”

One commented that if I go down the whole lot comes with me and I can’t afford to get sick.

When they were talking about their finances and how to take care of themselves in the event of any difficulty arising or relationship break up, one said that if that happened to her, she would just get on with it and cope.

In that situation, women are not always prepared and don’t always take the lead to cover themselves.

We looked at some solutions for all these concerns.

Firstly, women need to take care of themselves and meet as a support group and friends more than once or twice a month.

They literally need to organise real time out to regroup emotionally and mentally.

They also need to look at their financial situation and put into their budget a small saving into superannuation for themselves, this is important, not just employer contributions.

We also looked at the option of setting up a side income such as an online business that they can begin to grow now. 

One of the greatest issues coming through now are women over the age of 65 living in poverty and some are homeless.

Many of these women did not work much in their lifetime raising a family and did not have compulsory super until the last 27 years. 

Setting Up Online Income – Secondary Income.

Setting up an online income now and keeping it going for extra income for the family in the meantime is a great step up for a retirement income in years to come.

The secondary income can also be contributed to their super and within the super caps.

So, the main issues confronting women in 35 to 45 are their caring responsibilities and financial accounting for their families.

They are very conscious of not having enough money invested for their retirement nor earning enough to be able to contribute to super over the next 20 years.

Safety and security financially is the priority and paying down the mortgage is the main focus of their financial thinking over the next 15 years.

They are worried about the lack of lifestyle in retirement if they don’t start planning now.

Learning to Invest.

These women were also extremely interested in learning how to do their own investing for the savings that they managed to accrue.

‘The one thing I do feel a lack of confidence in, simply because I don’t have the information, is how to grow any kind of investments when I get the money accumulated’.

Basically, women want to know what to do with what they’ve got.

Since they don’t have enough information, they I don’t feel they have the confidence to do it themselves.

They know they’re good at budgeting and know that is with a bit of effort they could make some savings towards financial independence.

The two key factors that became clear from this discussion was that women must take good care of themselves, both mentally, emotionally and physically with regular exercise and a good diet as well as find assistance with the financial future now.

Ways to Keep You Moving Forward Post COVID19 Your Finances and Anxiety.

One Step at A Time – Your Finances

Avoidance is a natural reaction to the stress and shame of financial difficulty.

Running away from the reality of your finances is just going to make everything worse.

Instead, pick one easy thing to do every day,

Pay a bill, look at bank balances, communicate with one of your creditors. If you feel more driven or inspired, do more.

Set up part weekly or fortnightly payments so bills are not so overwhelming.

Try not to go down the rabbit hole of assuming there is nothing you can do to make extra cash.

Think about that second income and what your hobbies are and make a move toward that goal.

How to not get overwhelmed over juggling 2 jobs

Write it Down – Checklists or To-Do Lists

For a simple activity, tracking expenses is surprisingly powerful.

Whether you use a Google doc, a spreadsheet program or just a plain piece of paper.

Physically writing down your own spending creates a mental financial map in your brain.

Tracking creates accountability and can create better spending decisions.

When you know you’ll have to enter it into your spreadsheet or app..

There are many apps that can help you do this and are very easy to set up.

7 Best Budget APPS

Set an appointment in your diary with Your Finances

It can be somewhat overwhelming to compare your fixed and recurring expenses with your lower or non-existent income.

Instead of looking at just the actual amounts of monthly bills.

Consider the timing of when they need to be paid and organise them by the date due to being paid.

 When you have done this contact the creditor and arrange payment options to ease your anxiety.

See what’s coming up in the next week so you can plan.

Setup reminders in your calendar for alerts.

When everything seems chaotic and you can’t plan a month out, then plan for next week.” 

We are all in this together and there is no shame for having lost your job or have to exist on a reduced income.

 Reach out for help because the creditors will assist any way they can.

 Also attend to your mental and emotional health to support you through this time.  Take care of yourself to calm your mind that is in anxiety mode.

 Breathe.