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7 Steps to Take to Alleviate Your Financial and Job Security Worries

The COVID-19 pandemic has caused severe and extensive damage to many people’s finances. Worse still, financial experts say the financial and economic effects could persist long after the pandemic ultimately subsides. It’s going to take some time for life to get back to what we would call normal. 

Aside from the obvious medical issues, the pandemic has shown us this – how an unanticipated event that is entirely out of our control can instantly knock us out. Emergencies are going to happen and we should always be prepared for crazy events in life. But for most that is not the case. They know these things are going to happen, but they don’t prepare for them.

There is a solution to the problem though, and it begins with addressing what you can do right now, in the moment. You don’t have to be left helpless by a negative life event. You can be prepared if you take the right steps.

What are those steps? Here are seven things you can do to be prepared as possible when life circumstances impact your income. 

Build Up An Emergency Fund

Nobody knows what the future has in store. With that said, the best way to secure your finances if you’re hit with unplanned expenses is to build up a cash cushion. Financial experts recommend depositing at least 6-9 months’ worth of expenses in a savings account

However, it may not be easy to save that amount in a short time. Even so, keep in mind that any little bit will count. No amount is too small. At the least start with a $1,000 starter emergency fund to get going. Add to it as you are able. 

If you have trouble saving, consider automating savings into your account. Get your employer to send some straight to your bank account. That way it never ends up in your paycheck and you will be less likely to spend it once it’s in savings. 

You know emergencies will be coming at some point. Having an emergency fund is the first step on which all other financial success is built. 

Related Content: Emergency Fund Basics: The Step on Which All Other Success is Built 

Repay Your Debt

When emergencies arise, it’s important to limit how much money is going out of your wallet. That includes lowering your monthly debt obligations. Personal loans and credit card debt should be paid off as quickly as possible. 

Experts usually recommend two methods to deal with debt. The first one is called the debt avalanche method, where borrowers focus on repaying the high-cost debts first. The second method is called the debt snowball, where borrowers first focus on repaying the smallest debt.

If you have few financial obligations, low debt, and cash savings, then you are indeed in a great place to deal with whatever you might face. 

Related Content: How to Get out of Debt and Win in Five Simple Steps

Create An Action Plan

Just thinking about income or job loss is terrifying. However, the best way to relieve any stress when emergencies happen is by creating an action plan for a crisis. Make sure to create one before any emergency.

In your action plan, list the people you can reach out to or contact if you have difficulties paying your bills. Also, make a list of documents you might need to apply for unemployment benefits and what financial firms or lenders you regularly make payments to that you should inform if you lost your income source. 

Additionally, list the places where you can ask for help to limit your expenses and boost your income. Focus on finding a solution to what you’re going through at the moment so that you can eventually move forward. 

Finalize Your Budget

Ensuring you’re not going over your monthly budget and living within your means are the best ways to attain a debt-free lifestyle. Check out your finances, see the total amount of money you’ve been spending each month, and compare that with the money you should be saving. 

If you’re spending more, think about ways to live more frugally. Look for things you can control to meet an ideal situation. 

Related Content: The Ultimate Guide on How to Make the Best Monthly Budget

Find Additional Income Source

Sometimes, financial issues arise from lack of income sources. So, if you’re living within your means, sticking to a budget, and still have difficulties covering your expenses, you might need to generate another source of income. 

You may need to look for a part-time job to make some extra money for a time. Remember that more income provides more stability. If you can’t find a high-paying job, build wealth through passive income such as property rental. 

Your last resort is to take out a loan. Online lending platforms like CreditNinja.com can help you get sufficient funds to meet your needs. It offers quick loan approvals and simple repayment schemes. 

Prioritize Essential Bills

Some bills are more urgent than others, especially if you have a below-average income. The most important bill to handle is your rent payment or monthly mortgage because it keeps a roof over your head. What’s more, utility payments are important. Groceries and food are also necessities. 

Related Content: How to Prioritize What is Important When You Make a Budget

Get Insured

You can secure and watch over your finances by getting insured. In general, you can get these types of insurance:

  • Health insurance
  • Homeowner’s or renter’s insurance
  • Car insurance
  • Life insurance

Although many people might decide to skip on insurance, take note that it protects you from unexpected events that can send your finances plunging. 

Bottom Line

The COVID-19 pandemic is something we can learn from, though it’s heartbreaking and unfortunate. The hope is that more people will try to build a stash of money for emergencies to overcome the next challenge.

Leave a Comment or Answer a Question Below: How have you been impacted financially by Covid-19? What struggles do you have with making a budget? What is the biggest challenge for you to get out of debt? 

Photo by Valeria Boltneva from Pexels

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