It can feel pretty stressful when you don’t know what is around the corner.
And right now, it feels like we can’t even predict what will happen at the end of the week, let alone what might take place further in the future.
In the midst of a crisis, there are two areas that seem to cause the most stress…
Your finances and your health.
It feels like a constant worry over whether your finances are able to see you through and if your health is going to be impacted.
But, it’s time to flip those worries on their head. They don’t have to be a cause of constant concern.
When you have confidence in your financial capacity and your health, suddenly a lot of that stress just melts away.
Sounds pretty good, huh?
Well, it doesn’t have to be a dream. You can have confidence in these important areas even when you aren’t sure what tomorrow will bring.
Let me tell you how:
Health Is Wealth
Often, when there is a crisis going on, we feel like we need to hold everything together.
But, do you know what?
It is OK (and normal) to feel a bit out of sorts right now. We are all juggling A LOT! We are at home, but not in a normal capacity. All at once, we are trying to work (often in a makeshift office), home school, cook with our flour rations, panic about getting down to the last roll of toilet paper, and process what being in a health crisis actually means.
It is no wonder the stress levels are climbing.
Many people I have spoken to are all mentioning the same things – stress and fatigue. These two things are significantly impacting our mental health and wellbeing. And often, it is the ones we least expect that are feeling it the most.
Our kids and teens are really experiencing a rollercoaster ride right now. Massive highs and lows mean they are having to deal with some big emotions. One of my clients has an 11 year old son and he ended up in hospital during lockdown last year, due to an attempted suicide. It was completely unexpected, yet it highlights the stress these situations can put on young New Zealanders.
So, what can we do?
Thankfully, there are many organisations that have recognised good health is wealth! There are a number of options that provide help and support:
- Insurance – your policy could offer free counselling or other support. Touch base with me today to find out if this is an inclusion in your policy.
- Businesses – Xero has a number of resources and programs available that are designed to support the wellbeing of small business owners. Check them out here.
- Help & Support – There is a huge range of services available that support mental health and wellbeing. Here are some great options.
The thing is, health is not the only thing that is causing stress right now. The other is money.
Get Clarity On Your Finances
Let’s face it, a lot of stress is financial stress.
And a heap of that stress can be piled on when you don’t know if you will have enough money to do what you want to do. Especially if there’s the potential your income could be changing. After all, there are lots of companies restructuring right now, and some people are having to accept reduced wages due to Covid.
The good thing is, you can still take control of your finances when things are uncertain. Having a plan in your back pocket can help to relieve the stress of the unknown.
So, how can you make a plan when you don’t know what will happen?
Well, the secret is to have a couple of plans up your sleeve – plans that cover different eventualities. And you can do that through Financial Mapping.
I know that sounds like a bit of a fancy term, but it’s actually quite simple. Financial mapping is a tool that allows you to graph what your finances would look like at different points in your life. It can take into account a drop in income, help you plan for rising interest rates, having a baby, health events, or any other big financial decisions.
Let me give you an example of how financial mapping works…
Meet Neeve & Fletcher
Neeve* (38) & Fletcher* (35) are a couple with no dependents who are currently renting and wanting to buy their first home. However, Fletcher had to take a 20% salary reduction due to Covid. They were sure that this would derail their home ownership dream. So, they sat down with me to do some Financial Mapping and see what might still be possible.
Neeve & Fletcher are currently paying $600 weekly on rent, which is $31,200 a year. If they continue to rent long term, this figure could inflate to around $87,655 by age 65! Luckily, they won’t have to pay that whopping rent figure. The numbers work for them and they are still able to buy a home, despite the reduced income. They have a deposit ready to go, so we modelled out a potential future home for them with a mortgage of $1M @ 2.50% interest rate.
Their total household after tax income is $145,160, which includes Fletcher’s income reducing to 80% during lockdown. Like many couples, they would like to be mortgage free by age 65. With most mortgages issued at a 30 year term, they would be cutting it fine to reach this goal!
However, when assessing their spending, we discovered that they could allocate some of their monthly surplus into their mortgage payments. By doing that, they could cut the term of their mortgage from 30 to 23 years AND save a whopping $118,883 in interest!
What Does It Mean For Neeve & Fletcher?
Fletcher’s salary is $61k, so technically he would have had to work 2 whole years to earn the amount of money they would have paid in additional interest! Not only has he gained that 2 years of earnings back and secured the goal of being mortgage free by 65, but they will also have gained $325k in savings by retirement age (if they maintained the same habits).
Add in their Kiwisaver (plus the fact they have a free hold home) and they will have $1.373M to fund their retirement.
That’s all exciting news! But, we also mapped out some other scenarios that showed they would still be able to meet their financial obligations if interest rates rose or if they had to take more of an income cut unexpectedly.
Plus, to ensure that their plans would not be derailed by a change in health or their ability to earn, I helped them secure Asset Protection of Trauma, Income & Medical cover.
In an uncertain situation, Neeve & Fletcher have certainty about their future. They can become homeowners, be mortgage free by 65 and enjoy a comfortable retirement. Plus, they have everything mapped out in front of them for all eventualities.
Would You Like Financial Certainty?
While we have no control over what happens tomorrow, we can have control over how we weather the storms. By having a clear map of your finances, you have certainty that you can handle a range of different scenarios without it impacting your long term goals.
If you would like that certainty, then book in a time to chat with me about your options. In less than 30mins we can review your current situation and start to build some certainty about your future.
Also, don’t hesitate to contact me if you would like to understand your current insurance policies in greater detail. You may have access to the mental health benefits mentioned above without even knowing about it!
Talk to you soon.
*Please note that names have been changed for client privacy