Tips on Avoiding Financial Crisis in the Pandemic.
Since the inception of the novel coronavirus disease, COVID-19, which threw the whole world into a series of lockdowns and has been classified as a global pandemic, people have all had different kinds of worries. They worry about doing extra to keep safe and avoid contacting COVID-19 – sanitizing and using nose masks. The worry that students are going through given that they have been grounded at home for months because of this global pandemic.
The worry of parents in making sure that their children are safe and still find ways of putting food on the table in this almost economic-stagnant state. The worry of ensuring their livelihood and source of income is assured during and after the pandemic. And for those who do not have the assurance, they have to worry about ensuring they do not find themselves in a financial crisis at this critical period.
Therefore, managing your finances well and avoiding activating the financial self-destruct button is a real challenge for many during this trying time as the risk is way higher. However, with the worries and the hardship, it might be a little helpful that you are not alone and that if others are still around which means that they are surviving it, then you would eventually pull through too. But how?
Know Your Expenses
First thing that should be done is to determine how much cash you have on hand. You have to know the expenses you have to foot on a daily, weekly and monthly basis and how much it all amounts too. These expenses have deadlines, know them. Some might also have interests that will keep accruing till they are paid.
In such cases, you need to know them and prioritize them. This is so as to avoid unnecessary extra costs. If you can or if you need to delay another non-accumulating payment to be made, do so and make sure the one with accruing interests are cleared first. It is possible that you still have a source of income at this period. If yes, how much of the expenses does the earnings from this source cover? You need to keep tabs on all of these.
Not all payments on expenses have to be made immediately when they are brought. Sure, they might be due but when calculating and analyzing your finances for the month, if the available money is not going to be enough for all the expenses before you, you will need to differ some. However, when deferring these payments, make sure they are not the ones that would attract extra costs as penalty for not paying up as when due. Deferring such payments will help you avoid financial crises at a time like this because it frees up cash that is urgently needed at the given time.
Always try to stay up-to-date with the payments you have to make. When everything was all normal and going smoothly, people forgot to make payments on some bills. What would be said about this period when nothing is as usual, it wouldn’t be shocking that one forgets to make some payments as and when due. So, because of this, set reminders if necessary so as not to be caught off-guard with pending or overdue payments. Note all payments, note the ones you have successfully deferred and know the new due date.
In conclusion, we all have to keep our head above water and weather through this storm. It is indeed a trying time for all and sundry and as such we must make sure we try our best possible to not find ourselves in a financial crisis. This will just further add to the problems at hand and might result into depression.