FPA 2020 Survey Insights – COVID Edition &Top Tips For a Financially Secured Future
According to a recent FPA 2020 Survey, the global pandemic has caused an inexplicable disruption to our professional and social lives, one of the biggest setbacks humankind has witnessed in the last decade. Observations concede, four in ten Australians have lost income because of COVID-19 and are either struggling to make ends meet (11 percent) or dipping into savings to get by (31 percent). So, it is no wonder a quarter of Australians (23 percent) are experiencing acute stress about their financial position, with roughly a third (30 percent) ‘feeling okay’.
The figures also depict a contrasting story for people making the most of their changed circumstances. A small number (one in 10) said they are in a better position financially as they have managed to build some savings due to working from home and canceled holidays. And the majority, (46 percent) are still feeling in control of their finances, at least for the time being. It will be interesting to see if these financial comfort levels change in 2021, as JobKeeper comes to an end and the long-term effects of this pandemic may still linger on our economy and household incomes.
‘No Worries’ – Not Quite Yet
Despite the JobKeeper payments supporting businesses to keep employees on the payroll, ‘job insecurity’ is still the number one concern for Australians right now. Women are far more likely to be worried about losing their job (40 percent compared to 29 percent for men). Whereas, the vast majority in the 18-24 year-old cohort (81 percent) are worried about becoming unemployed.
Having ‘less in savings’ and ‘loss of super’ was next in line as the most common financial worries, except for the 35-44-year-old age group. This age group is most worried about paying off their mortgage, a concern, that is also linked to their work prospects and ability to earn an income.
What COVID Events Of 2020 Has Taught Us?
For vast Australians, the recent events of 2020 have been a wake-up call for their financial habits and behaviors. With 70 percent of Australians surveyed saying, they could have done better to improve their financial position. It seems we all have learned an important lesson about being financially prepared for the unexpected.
One in five said they could have put money in reserve for a rainy day, 17 percent think they could have controlled impulse buying and 11 percent believe they could have focused more on paying down their debt.
The good news is that these ‘key learnings’ are helping us re-think our financial priorities. When asked about positive behaviors that could be propelled post-COVID, the survey respondents ranked “be more frugal about my lifestyle choices” first, followed by “pay down debts” and “create a budget to understand what I’m spending and saving.”
Top Tips For a Financially Secured Future
To help you experience greater peace of mind and financial well-being, please read and share these simple steps to commit to a long-term plan for better financial outcomes:
- Prepare for ‘The Unknown’ – Take this as an opportunity to harness the positive financial habits you have imbibed during COVID. Prepare a list of expenses you don’t need anymore and another list of how you could use this money to meet your current needs or look after your future – by saving, investing, or paying down debts for example. By keeping a COVID mindset even after COVID is over, you can make a lot more progress towards your financial and life goals.
- Plan Ahead – Peacefully think over where you want to be financially in the future – think five years, ten years, or retirement. Then, work backwards for how to get there, along with a timeline of the important milestones you want to achieve along the way.
- Book an Appointment with a Qualified Financial Planner – Understanding your current financial situation and short and long-term financial goals – having a financial plan – means you can better manage your finances. Planning your immediate expenses, without compromising on saving for the future allows you to live your best today while making sure your future is on track. Contact Prime Advisory to speak with a Senior Financial Advisor, today.