Time to reset personal finance priorities

Excessively high debt is already making it tough for Barbadian households to get through the current period of high joblessness brought about by the COVID-19 crisis, a personal finance expert has said.

Marcia Cyrus, a management and financial planning specialist, made the comment as she joined UWI, Cave Hill’s Dean of Social Sciences Professor Justin Robinson for a webinar, Planning Now and For The Future – Economic and Financial Outlook hosted yesterday by the Cave Hill School of Business.

Cyrus, a former senior bank manager, said people would not have anticipated the current global economic shock created by the COVID-19 pandemic, but there are some people who have been managing their finances and “preparing for that rainy day”.

According to Cyrus: “Some of us never anticipated that we would have a rainy day. This is what we have been urging people to do. Please put aside something for the rainy days, and that has not happened. We have not been managing our debt. Some of us are prepared, however, not enough of us are. Those who are prepared really adhered to the message that has been sent. The reality is that the future is uncertain. It is cloudy and we don’t know how long this event will last.”

She also advised: “We need to know where we are at first. We need to know what our savings are and we need to know how much we spend on food and our mortgage. I also just want to warn people not to increase their expenses.”

On how to respond to moratorium offers from commercial banks and other financial institutions, the financial advisor stressed: “If you have a personal relationship with your banker, you need to speak to them. From my experience from several years in banking, banks do not want to sell your property or foreclose on your property. They don’t want you to default on your loan. They want you to pay your loan and so they are willing to work with you.

“Yes, the bank is a business…. The reality is you need to speak to your banker and have that conversation.”

At the same time, Cyrus urged Barbadians and others in the region to urgently reset their priorities, review their finances, and involve the entire family in the process. She also said their plans should always include payment of debt owed to creditors.

“For those persons who have lost their jobs and there is a strain on their income stream, one of the first things to do  is to check with your social security entity and check to see what is available to you,” she said.