Coronavirus Survival Kit- The 1-3-6 Contingency Plan




The effects of Coronavirus are well and truly hitting Australian households, the question is how can we get through this in one piece.


This article outlines a process you can follow to relieve anxiety and stress about the unknown.


It involves working through realistic and worst-case scenario’s and the considerations at each level.


This approach is called ‘fear setting’ and can be a confronting process, but can also be an effective way to relieve yourself of anxiety as it allows you to determine


  • What you can change – and what actions you can take now and in future?

  • What you can influence – and what actions you can take now and in future?

  • What you cannot change – what you need to let go of?


This should be done at a time where you are level-headed and calm (as much as you can be).

The alternative to this is coming up with the plan when the event occurs, resulting in potential for poor decision making due to heightened stress.


The most important part of this exercise is to put the plan away once you’re done.

You should build your plans and then store them away, only retrieving them in the event they come to fruition.


I would also suggest lining up something to make yourself feel good directly afterwards, as fear setting, while a cathartic process can also be quite emotionally draining.


The final key element of this process is perspective. Always try to look at your situation from someone else’s point of view (or multiple other perspectives) to both remove as much ‘emotion’ from you decision making, and to gain relativity – is your situation that bad? Do other’s have it worse?


The 1-3-6 approach refers to the amount of time we will be in this weird limbo isolation period – either 1, 3 or 6 months.


  • 1: Coronavirus situation goes for 1 month, and then everything starts returning to normal

  • 3: Coronavirus situation goes for 3 months, and then everything starts returning to normal

  • 6: Coronavirus situation goes for 6 months, and then everything starts returning to normal


The 6 areas to consider


For each of these periods you need to consider the lifestyle factors of 1-3 or 6 month Coronavirus periods.


This is different for everyone however the following are areas I would highlight as important

- Routine

- Health and Fitness

- Meaningful social connection

- Personal Development

- Acknowledgement

- Financial security


You can read more about these in another blog post here – from this point we will focus on Financial Security.


Your Income

The first step is to work out how your income will be at each of the 3 time frames.


  1. Where is your income going to come from over the period? How much will you get?

  2. If you are still receiving income, but it is going to stop at some point, is there an ability to take half pay or part time income to extend the period you receive money? Is that the best option?

  3. In the absence of income what other resources can you draw from to meet your expenses?

  4. Are you eligible for government assistance? Click here for our article on accessing Jobseekers.

  5. Are you eligible to draw from super? Should you? Click here for our article on accessing Super.

Your Expenses

Next you need to consider your outgoings. The more honest you are with yourself here the better – bad information results in bad outcomes.

  1. What are your regular expenses?

  2. Organise these into priority order where 1 Is a necessity, and a 5 could be done away with straight away.

  3. Be smart about this. Going into absolute austerity may result in greater levels of stress.

  4. Ensure if you cancel something you won’t suffer an adverse effect such as waiting periods and additional tax or loading on Private Health insurance.

  5. Plan out what expenses you may be able to freeze if you get into strife. Contact those companies now to ensure you understand your options and their criteria.

  6. GO back to your 1, 3 and 6 months of no income and work out, in those timeframes what expenses you can afford, what you can defer and what you need to cancel.

Specifically, what actions can you take?


If you’re salaried or still receiving income.


If you are still receiving a salary, have a candid conversation with your employer (or if self employed your employees and yourself) about the prospects of income over the 1-3-6 months.


Those in healthcare, banking, government and essential services roles will likely see their Salaries continue at some level for the whole period.


We may see a reduction in operations roles within the major banks and businesses as economic activity and spending starts decreases on what would normally be considered essentials (such as lending products, petrol etc).


The point of this exercise is to prepare yourself for worst case scenarios, so consider what you would do if you lost income, don’t leave your head in the sand.

No longer receiving income/high risk of losing it


Speak to your employer about taking half pay or using annual leave if needed.


If you have the flexibility with your employer, there may be a sweetspot where you get some income from work and some government assistance, to minimise the cash flow impact on your employer and create longevity in your cash flow.


If you have a skillset that could help you obtain temporary employment in call centres or supermarkets, apply for work.


Apply for government assistance (Remember, if you only receive the smallest Jobseekers when the Coronavirus Supplement comes in you will receive the full $550 per fortnight.)


Calculate your total liquid assets so you know how much money you have in reserve and if you know your expenses, how long it will last.


Starting retirement/Forced early retirement/Retirees:


If you are an ongoing client of Lime: Your portfolio should be set up in a manner that allows you to enter this phase comfortably, although depending on how far into the ‘implementation’ stage we got into you may feel like you are short on resources (or if you’re looking at the balance we planned to use, and your current balance, it may feel stressful).


Using the bucket approach, depending on your situation we have provisioned for around 3-5 years of income in your portfolio. This means you are safe to continue with life, although if you want to curb expenses because you’re uncomfortable that is ok. Remember, your long term assets are long term assets, don’t pay their balance any attention at this time.


Apply for Aged Pension: if you are of Aged Pension qualifying age your total assets may have decreased to a point where you qualify for aged pension where you didn’t before.

This could be a short-term relief of concession pricing on a number of your bills. As a guide, if your total assessable assets (cash in the bank, contents, investments, super/pension) are below the following amounts you could be eligible now

- Single/Homeowner: $578,250

- Single/Non-Homeowner: $788,750

- Couple/Homeowner: $869,500

- Couple/Non-Homeowner: $1,080,000

Where to now?

Start developing your plan!


If you would like to work through this exercise with professional guidance and help we are available to do so over zoom meetings. This can be as brief as an outline, or we can work with you to develop full 1-3-6 contingency including your budget, optimising your income, and obtaining centrelink payments.


To my ongoing service clients, this may already be included within your package. If not, it will be at a reduced rate.


For everyone else, please get in touch and give me an idea of your situation. We will then be able to give you a quote for our services.


We understand and empathise with the pressure that many people and families are under in these trying times. If you require financial advice or quite frankly are just a little lost with this, and unsure what to do next, don’t hesitate to reach out.

Here’s how you can contact us:

Book a video or phone appointment here.

Call us on 03 9801 8822 or email planning@limefinancial.com.au

Any information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. Because of this, you should consider whether the information is appropriate in light of your particular objectives, financial situation and needs.Past performance is not a reliable indicator of future performance. This article provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. This information does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness, having regard to your personal objectives, financial situation and needs having regard to these factors before acting on it. This article may contain material provided by third parties derived from sources believed to be accurate at its issue date. While such material is published with necessary permission, we do not accept any responsibility for the accuracy or completeness of, or endorse any such material. Except where contrary to law, we intend by this notice to exclude liability for this material.

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Email us at planning@limefinancial.com.au

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Because of this, you should consider, with or without the assistance of a financial adviser, whether the information is appropriate in light of your particular needs and circumstances.

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