COVID-19 has changed just about everything in the world. Even if you are not directly impacted, you are likely thinking about how you can make sure you are protected now and during any future global crises. There are several approaches you can take when analyzing your financial future, and trying to protect your business during the current global crisis. Our physical health and our financial health are affected by a global pandemic, but there is help available should you need it.
While we cannot prevent a global crisis, we can prepare ourselves by establishing emergency funds, and developing a disaster plan for any business you own. While you might not be in any debt right now, you could also consult with a debt relief company, as they can help you be proactive about avoiding debt. You also want to make sure you are paying off any debt you do have, so that you can then continue to increase your emergency savings.
Save as much as possible
Whether you are planning for the future, or paying down current debt, your top two priorities should be paying off and eliminating any debt you do have, and also saving as much as you can. Even if you have some debt, you will want to still save some money while you are paying the debt off. This will help prepare you for any future crisis, and ensure that your debt does not increase during an emergency.
When you are saving, you have a few different options for how to best save your money.
– Keep it liquid, and store it in your checking account. This will result in the lowest interest rate, but it means your funds will be almost instantly accessible. It is always a good idea to keep a small amount of money in this format.
– Invest in savings accounts or CDs. While you will not earn as much interest as if you buy stocks, you will earn a little bit of interest, and there is no risk of losing money. Your money will also be available to you within a few days.
– Take a risk and invest in the stock market. The stock market offers more pros and cons than can be covered in this article, but we can summarize it. Investing in stocks is quite risky, but there’s also a chance of a very high reward. You probably do not want to risk your money in the stock market if you are in debt, but if you are not in debt and have a little extra money, putting it in stocks can prove to be very fruitful in the long run.
Eliminating debt might not seem like a priority if you are scrambling to save any money for the future to better position yourself if there is another global crisis. However, getting rid of debt is one of the easiest ways for you to free up more money for the future.
Contacting a debt settlement company is a great first step. Rely on experts to advise you on the best path forward to pay down any debt you have.
In addition to paying down debt, you always want to take this time to analyze spending. If you are running a business, for example, you might need new furniture but is it necessary right now? If the old furniture is still perfectly functional, but looks a little stale, you are probably better off spending that money to pay down debt than you are to buy new furniture.
If you are in a lot of debt, it might seem insurmountable. It’s not. You can make small changes – yes, we are talking about not buying the $4 lattes anymore, which will help. Or you can take a bigger step like working on substantial payments to pay down debt. Whatever your circumstances, it will take discipline and proper budgeting for you to plan for a future global crisis.
There is a Path to Success
Planning for your financial future in a global crisis can be challenging. Right now, we are in a crisis, so everyone is affected on some level. Many lenders and banks are offering some financial relief during the global crisis we are experiencing. You are not alone, and many people are experiencing hardships. Some banks and lenders may defer payments on higher loans, like mortgages, with no penalties.
Even if you can pay your mortgage right now, if you can defer penalty-free, this might be a good way to easily build up an emergency fund. Put that mortgage savings to work for you and invest in your emergency fund. Your lenders can tell you what options are available for deferring payments.
It is tricky right now if you own a business. You might not be able to be open at all, or your hours and income might be drastically reduced. Work with local government officials to determine if you are eligible for small business hours. You can also create a plan for re-opening, and position yourself for future success. Take advantage of social media and communicate directly with your consumers.
Your world might have been wrecked by this crisis, but you are not alone, and there is a path to a future full of success and financial health.
Life during this pandemic has caused a lot of disruption and chaos, but if there is one thing that we can try to learn from this, it is how to effectively plan for a future global crisis. Things may get worse before they get better, so let’s use this experience to learn from past mistakes and establish the best plan for our financial health.
Pandemics and global crises are incredibly scary whether you are single, married with a family, or a business owner. It is of course ideal to plan and prepare for any emergency, not just a global pandemic. With the right mindset and guidance, you can be on your way to securing your financial goals and minimize losses in the midst of any crisis.