A financial stocktake
First, assess what income you can expect or what financial resources you have available. Possibilities may include:
- Are you or your partner able to work part-time?
- Do you have sick leave or long service leave?
- Do you have Income Protection or Trauma Insurance, either as a stand alone policy or part of a life policy? (This may be included in a policy you have purchased or your superannuation fund may provide this type of cover.)
- Do you have money in the bank or a line of credit against your mortgage that can be drawn against?
- Can any investments be accessed? (You may not need to dispose of them immediately, but just assessing your position is helpful.)
The second step involves checking on important expenses that need to be paid in the immediate future, including:
- rent or mortgage payments;
- electricity, gas and phone accounts;
- school fees and other education expenses;
- car and other loan repayments;
- medical and other insurance policies (it is important not to let these lapse when health is a problem);
- day-to-day living costs, such as food.
When you are under financial pressure, avoid or defer all unnecessary expenses – these can be paid when circumstances permit.
Endeavour to avoid making charges to credit cards unless you know you will be in a position to repay the full amount by the due date. Most credit cards have very high interest rates, some as high as 20%, and if they are not paid in full each month the interest continues to compound until the amount owing becomes excessive.