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‘Tried and tested’: Why age-old money advice still rings true

  • August 24 2020
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‘Tried and tested’: Why age-old money advice still rings true

By Grace Ormsby
August 24 2020

Day-to-day life is in no way normal this year, but leaning on lessons from the past is a great way to better equip ourselves for months more of uncertainty, according to a financial planner.

Why age-old money advice still rings true

‘Tried and tested’: Why age-old money advice still rings true

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  • August 24 2020
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Day-to-day life is in no way normal this year, but leaning on lessons from the past is a great way to better equip ourselves for months more of uncertainty, according to a financial planner.

Why age-old money advice still rings true

In conversation with nestegg, Nick Jackson, a certified financial planner with Flinders Wealth, said that during a pandemic, “the tried and tested lessons you probably heard from your grandparents still ring true”.

“Spend less than you earn, have a buffer for a rainy day, [and] borrow less than you can afford,” he advised.

“These things might sound cliched, but when an event like COVID happens, if you’ve built in these shock absorbers to your finances, you can not only survive, but thrive.”

According to the financial planner, when we stretch ourselves financially, periods like this “highlight very quickly how fragile your position can become”.

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“You want some fat or cushion to allow you to come through to the other side,” Mr Jackson said.

While COVID-19 is “unprecedented”, he commented that we will have to confront other financial and economic shocks in the future – reminding nestegg that “rainy days do happen”.

He emphasised the importance of staying disciplined, especially where an income has taken a hit or stopped completely.

“In this situation, what you can control are your expenses – look at cutting costs, try getting better deals with service providers and speak to your bank about lowering your interest rates on any loans or debt.”

He recommended being proactive “where possible”.

Even if your income is unscathed, “you still need to remain disciplined – we may not be able to go to the pub, but our Uber Eats bills and online shopping habit might be going through the roof”.

In the midst of so many restrictions on our day-to-day life, now is the perfect time to “better understand where our money has been going”, the financial planner considered.

“How much of our cash goes to non-discretionary expenses versus discretionary?” he queried.

Acknowledging that no one likes doing a budget, Mr Jackson did consider it as “important to understand your spending habits”. 

“Bank accounts are pretty good these days [at] showing you a breakdown of your spending – compare a recent monthly statement during lockdown to one from six months ago,” he advised.

“Maybe there are some permanent spending changes you can make to help you save or redirect to items or experiences you value more than others.”

Mr Jackson went on to note that for those who have maintained their job or earning capacity, “this could be a great opportunity to get ahead and set some money aside – build that cash buffer, extra mortgage repayments, maybe start saving for that dream holiday… One day in the future!”

“Reach out to a financial planner or even a financial counsellor – get some help consolidating debts, budgeting – [they can also] explain options or benefits that you may be entitled to and act as support as you work to get yourself back on your feet.”

‘Tried and tested’: Why age-old money advice still rings true
Why age-old money advice still rings true
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About the author

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Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

About the author

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

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