Thousands of people have lost their jobs, and many businesses have permanently shut their doors, and yet, we still haven’t seen the full picture of the COVID-19’s economic impact. As the pandemic persists, we should learn to take better care of our finances. This is not the time to make huge financial mistakes.
Everyone’s situation is unique, and so is each path to financial security. But many basic financial principles can prove valuable to anyone in these trying times. Here are some of them.
Pay down any credit card debt
While it’s tempting to spend your money only on essentials and save the rest, it’s crucial to pay down any outstanding credit card debt. This way, you can create some breathing room in your credit card, which you can use for a medical emergency or when you lost your job. Also, clearing all your credit card debts gives you peace of mind that you won’t have to pay off huge obligations while looking for another job.
Don’t make any rash decisions
Say, you have stocks or assets. Even if you want to have more cash on hand, don’t make any rash decisions about your assets, like selling stocks that aren’t doing well or predicting which stocks will go well amid the pandemic. Sure, there’s a chance you could guess right and reap huge investment returns. But there’s also a chance to make the wrong move and cost yourself even more money. It’s best to remain calm and call your financial planner to make a better decision about your investment portfolio.
Diversify your income
The saying, “don’t put all your eggs in one basket,” is often mentioned when talking about investments. But it can also be applied to your source of income. When you rely solely on a particular job for all your income, you risk losing the ability to meet your financial obligations if you get retrenched or forced on leave. Dig deep into your skills and see if you can do part-time work. Are you a good writer? Consider freelancing articles or tutoring English online. If you’re a good salesman, consider reselling items like home fitness equipment, Xorcom IP-PBX phone systems, and other valuable products.
Live within your means
This is not the time to indulge in too many luxuries. Live within your means to reduce your usual monthly expenses and free up any extra cash you can add to your emergency fund. If it’s possible, live below your means. That’s even better, especially that the next few months can be difficult financially.
How to live within or below your means? Start with reviewing your monthly budget. Go through your credit card statements to look for subscriptions you may have forgotten or no longer use. Cut back on non-essential purchases until you feel more secure about your finances and the global economy again.
When it comes to managing your finances during difficult times, always weigh in on all your options and keep yourself from making rash decisions. The economy may be unstable, but by being smart about how you spend, earn, and invest your money, you and your family can ride out the storm.