What the world is facing right now is perhaps one of the biggest and the greatest crises of all times. It is probably the single-most colossal threat to humankind and its future on this planet. When the world reported the first case of the Novel Coronavirus, no one knew that humanity would have to deal with a pandemic of epic proportions. Things quickly descended into chaos, and the virus spread across countries like wildfire. The global economy was devastated and has never fully been able to recover ever since. Plus, as experts suggest, even with multiple vaccines in place and a mass inoculation program, the pandemic is far from over. We still have more waves to deal with, and as reports suggest, various countries are already reeling under the pressure of the second wave. Healthcare systems have collapsed, and people are losing their lives and livelihood every minute.
Speaking of which, the COVID-19 crisis did not only affect people’s physical and mental health. It also put families out of jobs and pushed them to the brink of bankruptcy. Those who had enough savings to fall back on survived. However, those who never paid attention to their personal savings found themselves in a precarious condition.
On that note, in this article, we shall talk about the need for planning personal finances and ways in which you can do the same. No one can predict what the future holds for us, and how many more pandemics we have to face. However, when the time comes, we must be better prepared and find ourselves in a position to fight the crisis.
The Need for Planning Your Personal Finances and Ways to Do the Same:
The pandemic has shown us how unprepared we are in dealing with financial emergencies in our lives. People who are privileged enough to make money throughout the year do not save up much, and this leads to utter chaos and adds to the woes when a crisis of this sort comes up. Therefore, it is incredibly important that people start planning their finances right from the day they start earning so that they can be better prepared to deal with any financial crunch or crisis.
The pandemic is most likely going to impact the rest of our financial lives and in unimaginable ways. Therefore, it is vital that we start managing our personal finances, regardless of our income, so that we can navigate these rough waters and put our money to better use. If you are one of those who want to manage their personal finances better, you have come to the right place.
Always Keep Adding to Your Rainy Day Fund
The first thing that you must do before anything is set up an emergency fund and keep adding money to the same. This is not just something that you must do with your personal finances but also for your business. If you have a business that you need to take care of and manage various cash distribution processes, you must ensure that you have an emergency fund set aside. Your emergency fund must consist of at least six months’ worth of money so that you can manage those months even without any income.
Manage Your Debts
Debts can ruin your life if you do not deploy the right debt management strategies. In fact, if you do not pay your debts on time, you shall end up with a bad credit score, which is a stain on your financial reputation. See if you could refinance your loan at a lower rate and look for financial aid if you are unable to pay off your debts on time. No matter what you do, it is important to clear your debts on time so that you do not end up in a vicious cycle.
Cut Down On Your Expenses as Much as Possible
The final tip that we have for you is that of cutting down your expenses in every possible way. Cancel your subscription to multiple e-papers and streaming platforms. It is obviously great to kill time in the lockdown watching movies and shows all day, but it is not a necessity. Splurge on your necessities and do away with the rest as much as you can. This does not mean that you should not engage in activities that are fun. This only means that you must know when to spend and when to cut back.
Summing Up:
These are the three most important tips that you must pay attention to if you are to manage your personal finances well and stay afloat amidst crises. These tips might seem really simple at a cursory glance, but they are all that makes any difference. Therefore, make sure that you are following these aforementioned tips and take a step in the right direction.
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