With every working Australian now relying on their superannuation balance to fund their retirement, the average Aussie has been forced to become more aware of what’s happening across the global financial systems.
The pain of the Global Financial Crisis is never far away even though our politicians keep assuring us of Australia’s strong economy. The governor of the Reserve Bank of Australia (RBA), Glenn Stevens, has indicated that inflation is currently under control, though with the interest rate cut in November 2011 it will need to be closely monitored. All reports are that our economy continues to be strong off the back of high terms of trade and low unemployment.
But nobody has a crystal ball to gaze into the future, and with some of our most iconic companies cutting jobs the inevitable question ‘what if I lose my job?’ visits the minds of many. Obviously you can’t control everything however in this nervous economic climate there are steps you can take to shield your family from the worst.
a backup plan
protect your mortgage
If you were made involuntarily redundant, a mortgage protection policy can help you to continue meeting your home loan obligations.
protect your income
Although this could be seen as an extra monthly expense, what would happen if you or your spouse were ill or injured and unable to work? A combination of medical expenses with a reduction in household earnings can have a devastating result. Income protection can provide a regular income to enable you to meet your commitments.
save some money
Saving money doesn’t have to be hard. Open an online fee-free savings account that pays higher interest than your everyday bank account and set up a regular automatic transfer from every pay. Start small if you have to but as you see the balance building up over the months, you will feel more secure knowing you’re creating a financial backup.
Losing a job or an income is one of the most emotional moments a person can experience but knowing that you have prepared a strategy to safeguard against the financial impacts will help you and your family sleep better at night.
www.rba.gov.au Statement on Monetary Policy, November 2011