If you are currently experiencing a panic attack after intaking the constant news cycle on the economic situation, I have some news for you. Firstly, you have every right to feel panicked. I know the hard truth may not be helpful to your anxieties, but we first have to accept the truth before we can figure out the next steps. And your next steps should be establishing a lockdown finance plan.
Here in Australia, we’re officially in recession for the first time in almost 30 years. Some of us were not even born the last time a recession occurred. This record period of uninterrupted growth is a feat that has never been achieved by any other developed advanced country in the Organisation for Economic Cooperation and Development (OECD) grouping.
Now we have acknowledged the hard truth, let's examine what is the effect of this COVID-19 induced recession.
Your income may have been affected in some way, either through reduced hours, loss of a job, drop-in business or any other form of negative financial event. After the restrictions in Melbourne which have been some of the longest in the world, it is clear to see the effects of ongoing COVID-19 imposed restrictions. We can complain about the current situation, however, the outcomes are caused by an unfortunate result of one of the steepest, and sharpest economic contraction that most developed countries have ever experienced in recent history.
Here in Melbourne, Australia we are slowly exiting the second lockdown and stay at home orders, that has cost an estimated AUD$1 billion a week in economic output. This will cause huge damage to thousands of jobs and businesses as we have tried to come to grips with a second wave of the coronavirus raging through the economy. It all seems a little grim, doesn’t it? But with a focus on a lockdown finance plan, we can make it a little.
Okay, I know I have made your panic attack a little more panicked. But we all need to face the reality before we can take actions to change for the future. As we transition into post lockdown, or if you're still in lockdown, there are a handful of things you can do to benefit your financial future, laying some foundations that should pay off later. These actions will keep you sane, busy, and in a growth mindset whilst we continue to batten down the hatches across the globe.
Before you get too excited these are not miracle money cures, or necessarily solutions to your lack of current income. I’m more focused on tangible steps that leave you in good stead when the panic period finally starts to lapse.
In Australia, the government has deemed a range of in-demand careers that will emerge post-COVID-19 pandemic. Take advantage of any government subsidies to get you retrained and primed for a post COVID workforce.
Look into informal education as well. For example, SkillShare is the best community learning tool, to bring any outlying skills up to standard. This will also keep you busy and motivated during extended lockdowns.
We are all slowly going mad at home, but before you spiral into a complete panic about your current situation, think about how people who are less fortunate than yourself, are dealing with COVID-19. If they were struggling in a normal setting, you can only imagine the level of hardship they must be experiencing now.
Not to mention helping others will help you feel a little better about the world. This step can also help with your career, allowing you to explore avenues and skills you might not have if money was a part of the equation. We need to stick together right now, so whether it’s through donation, community organisation or simply help a person in need. We all need to get a little more involved with our community to help each other.
We all know the idea of a side hustle has been done to death, and every person with an internet connection is starting a business, Amazon store, drop-ship, etc. Seriously thinking about alternative income is a smart move right and addition to your lockdown finance plan, and let's be honest you’re likely to have some spare time at the moment!
Rather than setting your sights on being the next Jeff Bezos, it’s best to aim for the realm of realism. Take stock of your current skillset and identify areas you know you're a boss at. The hard part is learning how to package and market that skill set.
Start with one product or service you can sell and focus your attention there. Remember it’s a side hustle, not a new career, or maybe it might become one? The aim is to turn your skills into income with as little time as possible.
Now is the best time to evaluate your financial circumstances and hit reset if needed. You likely have little distractions, minimal social commitments and a need to save money right now.
Do a complete audit of your outgoings and kill anything non-essential. Re-negotiate your living situation whether that be rent or a mortgage, map out your costs for the few months and be aware of your incoming expenses, the more you understand about your money the better you can maintain it.
Next set some saving goals for yourself and get in the habit of sticking to it. Establishing a Lockdown Finance Plan from this financially stressed time could be one of the few silver linings to 2020.