Across the globe, we’re currently facing high levels of financial uncertainty and as a young person who wasn’t working or investing during the last financial crisis back in 07/08, it’s a scary time. At the moment we have no idea what’s going to happen over the next few months: Will my family and friends be okay? What if I get sick? Will I lose my job? Will my emergency fund last? What if I can’t pay my rent?

Everything is up in the air at the moment and we’re taking it day by day, but it’s hard to manage your finances and work towards any goals you’ve set, with so much uncertainty in the world. Here are some of the key things to consider actioning, to prepare your finances for the coming months.

Cut Unnecessary Expenses From Your Budget

When facing financial unknowns it’s a good idea to make your lifestyle as lean as possible. It’s important to start separating the essentials from the niceties in your life and cull anything not required. This will also help you to work out what your minimum living costs are each month, which will help you in knowing how much to put aside in your emergency fund.

Build Up Your Emergency Fund ASAP

Once you know exactly how much you need to survive each month, you need to start building up your emergency fund. If you don’t already have cash put aside to cover 3–6 months of living expenses, it’s essential that you prioritise this. This will help you and your family weather any loss of income and unexpected expenses over the coming months. If you have any unexpected windfalls such as a tax refund or bonus this year, send that money straight into your emergency fund.

To get your emergency fund started today you could sell spare items around the house on Gumtree or FB Marketplace, offer online tutoring, get yourself on Airtasker and complete jobs online and locally and register for food delivery services like Uber Eats and Door Dash. Roles in Australia that are currently in hiring mode include supermarket workers, fruit pickers/farm labourers, call centre staff, pharmacy staff and delivery drivers.

Put on Your Oxygen Mask First

As much as we need to keep supporting our local businesses during this time, it’s important to make sure that your finances are sorted out first. This will mean you are able to support your family over the coming months, as we face other challenges together as a community.

Prioritize cutting unnecessary expenses, building up your emergency fund and making sure you have a source of income. If you do need a loan due to various economic circumstances over the coming months, Good Shepherd Microfinance provides interest-free loans.

Focus on Investing in Yourself

As it looks like we’ll be at home a lot more over the coming few weeks (maybe months), it’s the perfect time to level up your skills and learn new things. This will make you a more competitive employee/candidate when things settle down.

Whether it’s finally starting that uni course you were always talking about doing, reading some good books, learning the basics of personal finance, watching Crash Course videos, completing your professional development requirements for work or taking a course online (Khan Academy, Udemy, Skillshare, Coursera, edX), take advantage of this time at home.

Only Invest With a Long Term Time Horizon

You might be looking at the current market drop as a good opportunity to get started investing or add to your current investments — if you’re able to look past the catastrophising news headlines telling us the world is ending. The most important thing to ask yourself before investing is whether you’ve got your emergency fund sorted — and keep it safe (aka don’t invest it). If you are financially secure and have a fairly safe income source, then you might consider dollar-cost averaging into the market (because no one can pick the bottom).

It’s going to be a challenging time ahead, so don’t forget to make sure your finances are as prepared as possible. If you have any suggestions on how you’re preparing your finances for the challenges ahead, please send them my way at howtomoneyaus@gmail.com and I’d love to share them.

Kate — HTM Editor & Host

Want to learn more about money and personal finance? Check out our article archive, the How To Money Podcast and the Australian Finance Podcast. Catch us on Twitter @HowToMoneyAUS and Instagram on @HowToMoneyAUS.

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The information on this blog and website is of a general and educational nature only. It does not take into account your individual financial situation, objectives or needs. You should consider your own financial position and requirements before making a decision, as we are not an advisory service. We recommend you consult a licensed financial adviser in order to assist you. The information is based on assumptions or market conditions which can change without notice, and this will impact the accuracy of the information provided. This website and blog occasionally provide links to third-party sites, aimed at helping you gather the information required to make an informed decision — we may receive payment for these referrals.