A key focus of my blog is Financial Literacy/Money. Everyone will fall upon some financial hard times. The key is navigating that rough patch and coming out healthy on the back end whether that be saving money or finding another job. The following contributed post is entitled, Taking The Best Care Of Your Finances During A Bad Financial Patch.
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Managing finances is often a difficult task. Even more so during these turbulent times of Covid-19. One of the worst situations that causes economic crises is unemployment and the current case is no exception. Crises do not warn and often catch people off guard and without a plan of action. Hence the importance of having, among other things, an emergency fund and a plan to reduce some non-essential expenses. However, Covid-19 among all the bad has left us many lessons for humanity, and has made us realize that no one is guaranteed anything. While we can’t control losing our jobs, we can control our financial situation in that scenario. In this article we will give you some recommendations to take care of your money if you are going through a bad financial patch.
1. Make a survival budget
First of all, if your income has decreased or stopped, you must immediately reduce the expenses that are not essential. Keep those that are essential for your day to day. This budget should not be a regular budget, like the one you used to do when you had a fixed income, where an impulsive purchase was possible. Now, it is crucial to think only about what is essential to live as food and shelter. You can also reduce some services such as cable or the gym and look for low-cost fun alternatives such as free events on social networks. This budget should last you for at least three months. This will give you enough time to steady yourself and get things back on track.
2. Be aware of what is coming in and going out
Oftentimes we have credit card repayments, other bills and utilities and may not be fully aware of what they all are. We may have signed up to a subscription years ago and we are still paying the monthly fees for it. Go through everything with a fine tooth comb. This is vital for finances. You may see something on your statement such as Best uber technologies and want to double check what this is. Each item can be broken down so you are on top of your outgoings.
3. Actively seek sources of income
Looking for a job is a full-time job and requires a lot of discipline. Remember that doesn’t mean you have to spend all day sending your CV everywhere. You can opt for alternative jobs while you find the opportunity you’re waiting for. For example, offer your services as a freelancer. Do consultancies or if you have the possibility, undertake. In addition, you can take advantage of the “free” time studying, developing your skills or doing activities that help you enhance your resume in the meantime.
4. Your assets can help you
If the situation gets complicated and debts increase, one option may be to liquidate some of your assets to get the cash you need to cope with the crisis. You can consider non-essential goods that allow you a respite for the time being. Rest assured, when you are in a better situation you will be able to recover them.
5. Claim what’s yours
Finally, this might be the time for you to seek what you’re owed. It might be the case that you’re entitled to workers compensation from a previous employer. If you have been in a position where you feel that’s the case, you should claim what’s yours. This could really help you out of the stressful situation that you’re in right now.