Hi everyone, I hope you've had a great month so far, and for those of you with kids, I hope the school holidays, and the juggling act that comes with them, have gone well.
Obviously it’s been a pretty uncertain time in the world, and it’s impacting all of our wallets - the ongoing situation in the Middle East and its impact on fuel prices and our broader economy. The last month or so has felt extremely volatile, hanging off the overnight news cycle. While the last couple of weeks have felt relatively “stable” in comparison, with a ceasefire and some negotiation starting to happen, there is potentially still a fair bit to wash through.
I want to focus on what we can actually control in our financial lives.
Yes, we're all feeling it at the fuel pump. All vehicles, but especially diesels, have seen the cost surge. But here's the thing - while we can't control what happens in global markets or geopolitical situations, we absolutely can take control of our own financial lives.
Let me start with something that might sound boring but is absolutely critical right now - holding emergency funds. I know it's hard when costs are rising everywhere, but having cash set aside is your financial lifeline. Here's why:
They allow you to absorb additional costs in the short term without derailing your entire financial plan. They’re always good for covering unexpected expenses (otherwise known as “life”), but in an uncertain world, I think they are more important than ever.
If you don't have emergency savings yet, here are some options to explore:
Talk to your bank about refinancing and setting up a revolving credit facility as a backstop, especially if you have a mortgage. Look around your house and garage - sell items you're not using. While they might not be worth much individually, every dollar adds up to build that crucial financial buffer.
Mortgage interest rates have been under pressure this past month. This isn't driven by Reserve Bank decisions, but by rising costs of funds overseas, which increases banks' costs and gets passed on to you. Fixed rates across the board have gone up, particularly in the medium to longer terms.
My advice? Use your bank's rate lock window when you can. Most banks allow you to lock in rates 30 to 60 days before your fixed rate expires.
Something I have been reminding myself of in the last month, as I get sucked into reading too much news, is simply to “focus on what I can control”.
Don't forget to download our CIC Financial app using access code CIC. You'll find benefits, discounts, and content that can help stretch your dollar further across a number of areas.
Chat soon.
Kieran Sutherland
Financial and Business Adviser
p. 03 377 3693