Q.Should I keep my KiwiSaver payments going during lockdown? Both my partner and I are working from home at the moment but our work could be scaled down and then money will be very tight. We have $2000 in emergency savings but that probably isn't enough in the current situation and we have ongoing mortgage payments.
A.You need to weigh up your short term and long-term goals. Continuing with your KiwiSaver contributions will be good for your balance down the track, as unit prices are lower now so your money will buy more units. Eventually as markets recover, you will reap the benefits. However, you will have to weigh this up against your short-term needs.
Building up your emergency savings should really be your priority right now. Currently we are in lockdown for 4 weeks, but if Covid-19 is not under control by the end of this period it could be extended.
This is a good time to review your budget and cut back on all unnecessary spending. Because most of us are confined to our homes, we will be spending less.
Compare your spending now to the same time a year ago, by going through your bank and credit card statements. Put together a realistic budget and learn to make do with less.
Stopping your KiwiSaver contributions is called a 'savings suspension'.