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Home / Managing Your Money

How can you make it through a financial hardship?

 The less expenses you have, the more you have to save (Shutterstock)

During these unprecedented times, many of us are clutching onto the little finances we have hoping for some light at the end of the tunnel.

The truth, however, is the future still looks bleak.

Fuel prices are sky rocketing, inflation is at an all-time high and some of us had to take pay cuts to remain employed.

All this while the bills continue to pile up with very little reprieve. Parents are struggling to keep a roof over their children’s heads, school fees is already a challenge and having three meals a day is slowly becoming a luxury for many.

People all over the world are struggling to stay afloat. And by knowing how tough the financial situation is, this is the time to plan and make some serious decisions. We look at some of the things you can consider doing to improve your financial situation.

1.Paying off debts

How much debt are you in? This is the first question you need to ask yourself then find a way to pay them off.

Considering the unique circumstances we are facing, this is honestly not the best time to pay them off all at once and remain with zero balance.

This is not the time to move like you did before. You need to have cash ready because anything can happen and you need to be financially ready as thus you should find a formula to gradually pay off your debts without running out of emergency funds.

 This is the time to plan and make some serious decisions (Shutterstock)

2.Step down

You may struggle to get used to your new life but you will find a way around it, trust me. This is not the time to be spending like things are normal when we are living through a pandemic and money is tight.

Make conscious decisions to cut down your expenses and live a frugal life. There are some things you can sell or do without and they will not have a great impact on your life.

The less expenses you have, the more you have to save. Remember this every time you want to order take out or pay for cable yet you have home internet.

3.Diversify your investments

If you had invested in the stock market and you had to count your losses, do not give up just yet. You may have lost a significant portion of your investment but that does not mean you stop taking risks.

Identify businesses you can invest in or start to maximize your returns. The more you put out there the more you are likely to make and should one business tank, you have other options in your portfolio to fall back on.

4.Start an emergency fund

The best way to get around during a financial hardship is by setting up an emergency fund. You will be so glad you did so in the event you lose your job or fall ill. An emergency fund acts as a safety net.

And as much as cash can be tight, you may need to find a way to set aside a certain percentage of your income. Don’t wait until it is too late when recession hits or your debts go off the roof and you can’t repay them.

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