Jeremy Tauri is an associate at Plus Chartered Accountants.
Jeremy Tauri is an associate at Plus Chartered Accountants.
It seems that everywhere you look at the moment, there's a coronavirus scare story lurking, ready to convince you that we're all approaching economic doom.
I'm not going to make a call on whether a recession is just around the corner - if I had that insight into the future I'd probably beoff buying Lotto tickets.
But I can tell you that at some point, economic circumstances will change. Here are some things that you can do to help get through it, whether it's covid-19 induced or not.
Understand your own risk factors: Economists like to talk about things at a very high level. They talk about economies' growth slowing and the job market as a whole. But no one lives their lives like that. Your situation is unique - as are the risks you're facing. If you're employed, consider how exposed your employer is to changes that are happening in the market. Are they responding well to that or can you see increased pressure likely to come on in future? If the are warning signs, you might want to think about how you can make yourself more flexible and employable so you can navigate the job market easily if need be. If you run a business, consider the threats and opportunities that are unique to your business. It's entirely possible to have your own recession even while the rest of the economy is booming. Don't let that happen.
Watch your spending: I'm not saying you have to cut your spending - that's a good way to turn the prospect of a widespread recession into a real one. But it's a good idea to have a sense of where and how quickly you could trim the amount of money heading out of your accounts. That will give you a sense of how resilient you are to downturns. Work out your budgets to what a minimum might look like then review its realism. Understand your plan: A short-term hiccup doesn't need to be a big deal if you're still on the right track overall. Don't worry about your KiwiSaver balance dropping if the settings are right and don't worry about a minor blip in your business turnover if you understand why and have a good strategy to get back on track.
Don't panic: There's nothing like panic to breed panic and make a bad situation worse. Stay optimistic, focus on what's within your control to improve your circumstances, and stick to the course.
Jeremy Tauri is an associate at Plus Chartered Accountants.
