Video: Building An Emergency Fund
Kiwis have been reminded in recent months just how easily a financial disaster can strike.
Many Cantabrians who had apparently secure work or good profitable businesses found themselves without income in the minutes it took for the earthquake to take its terrible toll.
The keys to surviving disaster financially are:
- Stay positive
- Manage your finances with a fine-toothed comb
- Prepare a job seeking plan
- Update your CV
The difficulty is that people react to disasters in very different ways. Some are overcome by the trauma. Those with resilience pick themselves up, dust themselves off and get started again.
Video: Emergency Funds
It’s hard to give advice to the first group. They probably need psychological help more than “advice”. An AUT University study found all sorts of effects from redundancy, which leaves some people hamstrung such as:
- anomie and dissatisfaction with life
- reduced social interaction and
- political alienation.
The latter resilient group will already be moving forward. Some who have lost their jobs will be actively seeking work or putting themselves forward as contractors in the meantime until they decide what to do.
It’s a time to be creative with your thinking. Consider looking for overseas contracts. Some of the Pike River Mine workers upped sticks and went to Oz, within weeks of the mine closing.
Despite what you read in the newspapers, beneficiaries aren’t living the life of riley. Most struggle to put food on the table and pay bills. If you’re used to more than a subsistence living you’re soon going to eat into your capital.
Even if you don’t spend a day on the benefit, check out what government and/or private assistance you can get. For example, you might be able to benefit from packages offered by WINZ or through the Inland Revenue that don’t require you to be on the benefits.
Also check every possible source of money you might be entitled to from obscure insurance policies on your HP contracts to the amount of child support you’re being paid – if applicable.
Oddly enough redundancy is the making of some people. They take the shock of losing their jobs and decide never to let it happen to them again. Some will start up in completely new fields – perhaps something they’ve dreamed of. Others will become self-employed and business owners in their erstwhile field.
When a real personal emergency strikes, don’t be afraid to spend your emergency fund. That is what such funds are for.
If you know when you’ll next earn a full income, stop spending. Cut every non-essential cash-eater from you budget. New clothes, toys, widgets, gadgets, etcetera are not essential. Cut your meat intake at least in half and buy budget brands. There is no shame in any of that. To the contrary, it takes a strong will do cut spending.
Finally, ask for help. Too few Kiwis do this. Yet we live in a society where people feel good about helping others. It may just be looking after the children, or as a non-driving newly widowed friend said to me: “If you see me struggling up the hill from the supermarket, pick me up.”