What the recession means for you
Our recession has been confirmed by today's Australian Bureau of Statistics data and the coronavirus is causing it to drag on longer than expected.
With a quarter of the nation's economy - Victoria - in strict lockdowns, the hoped-for "snap back" in the current September quarter remains a dream.
Australians can take some solace from the fact we are doing better economically than most countries, but that means little to people struggling with job losses and reduced income during this first recession in 29 years.
Here's what it means for you.
If you still have a job - and are working the hours you need - you should escape most of the financial pain.
Economists say people with jobs during recessions often do well on the personal finance front, because interest rates will be much lower to try to kickstart the economy and extra government cash flows to households. We are seeing both at the moment.
Extensions of the JobKeeper and JobSeeker COVID-19 packages beyond September have been approved by parliament and will provide a financial cushion for many.
YOUR HOME LOAN
Expect low interest rates to last for a long time, recession or not. The Reserve Bank is in no rush to raise the official interest rate from its current record low 0.25 per cent. Make the most of the interest rate situation by making all the extra loan repayments you can.
It's been a volatile year on the sharemarket, and investors should expect the rollercoaster ride to continue as the world seeks a virus vaccine and then countries try to bounce back economically.
Some market analysts think another big fall is coming, while others say there could be a big boost for sharemarkets globally when a vaccine arrives.
If you're a long-term investor, stick to your strategy, avoid knee-jerk reactions and seek professional advice if you're unsure. Trying to time your buying and selling during this sort of volatility is just asking for trouble.
Superannuation is the longest-term investment for most of us, so it's really a case of sitting tight on your nest egg and avoiding the emotions of fear and greed.
We may have already seen the worst of the COVID-19 impact on super fund balances, but nobody knows for sure.
What we do know is that super fund members who switched to the safety of cash at the bottom of the global financial crisis in 2009 missed out on a decade of great growth for their retirement savings.
Originally published as What the recession means for you