Four ways to make it through a crisis with your finances intact
MANAGING YOUR MONEY
By ESTHER MUCHENE |
2 months ago
During these unprecedented times, many of us are clutching onto the little finances we have hoping for a light ahead of the tunnel.
The truth however is, the future 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 will soon become a problem and having three meals a day is 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. Failure to do so you will not be secure. Here is what you need to do:
- Pay 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 currently as the world, this is honestly not the best time to pay them off all at once and remain with zero balance.
If you think about it, would you rather be debt free and have no money at all even to buy food or would you rather pay off a few debts and have some cash? Definitely the latter.
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.
- 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’re 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 you have, the more you have to save so remember that every time you want to order take out or pay for cable when you have internet services.
- 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 onto.
- Start an emergency fund
The best way to get around during this 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. This will act as a safety net.
And as much as cash is tight right now, 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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