If you are feeling stressed and suffering from “Financial Insomnia”, please STOP! Don’t Panic! Just take a deep breath, breath out and let me share with you what you can do in the time of crisis. This is a season and all seasons pass. You need to be a position to make well informed, practical decisions that are prudent and well thought through, if not, the consequences could be catastrophic to you, your family and most importantly your finances.  

Here are some simple tips for you if the financial strain is getting the better of you.

If you feel you’re having a financial crisis and need to “cut back” please look at the following as alternatives: 

1: Phone around, for quotes to save you some money on your short term insurance cover.

2: Do the same on your medical Aid & Gap cover.

3: Contact your bank and ask for “an interest” only payment on your bond in the interim, the capital portion will not be debited thus reducing your debit order to the interest portion only. Extend your term of the loan, this too will result in a lower premium and you can catch up later. 

4: Contact your bank and ask for “an interest” only payment on your vehicle and asset finance, the capital portion will not be debited thus reducing your debit order. 

5: Take premium holidays on savings if you have this option available, there is no impact on your investment and you can start it up again afterwards. It will reduce your savings in the short term but give you the saving you may need. 

6: Other things to consider are going into arrears on car and bond payments if the situation gets bad enough, it’s not ideal however these can be caught up when you get your affordability back on track. 

7: Contact your financial advisor to restructure your Life Policy. There are many ways of looking at your current policies and structures, it’s not ideal in all circumstances but if you have exhausted all the other options it’s one you may need to consider. 

 

Remember

1: If you reduce or cancel your life cover, disability cover, dread disease cover or income protection and you don’t replace it, you may potentially be underinsured when you need it most. You and/or your family may suffer the financial consequences and this, you want to avoid at all costs. You need this cover now more than ever. 

2: If you reduce your risk cover there is a chance you will potentially not get it back again in the future due to changes in your health. You may end up having exclusions, loadings or declines in the future.

3: If you reduce your risk cover it may cost you more when you alter the policy “back to what it was” because of the insurer’s new ratings on your age if you are older than when to take it out initially the premium will be based on your age when you remedy it. 

4: If you are advised to change your current cover to an alternate insurer you must ensure that all the benefits, as well as any consequences, are explained to you upfront, so there are no “grey areas” or T&C’s left unanswered. 

5. If you are with Momentum currently you can get up to 60% discounts on your risk policies so take full advantage of this. Ask your advisor to guide you and show you how. 

 6. Setting up a detailed budget is essential for you and your family; it helps identify the good and bad spending habits and it clarifies what is “important to have” and what is “nice to have”. From your budget, we will sit with you and look at the most appropriate way to keep you on track in achieving your objectives.

For further advice, and peace of mind, you can contact me on jfabre@qfg.co.za. I have a team of specialists and professionals who can assist you with your holistic financial planning needs. Let me guide you through this journey and show you how to make simple sense of this during this crazy time. This offer is free of charge to anyone who is in need. 

 

Guest Post by Jody Fabre – Financial Advisor

 

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