During any financial or economic crisis, finances become tight due to small and medium scale businesses being forced to shut down and lay off their employees. For single working family members that solely support their families with a single paycheck, a layoff is the last thing their family needs to push them over the financial cliff.
Further, in this time of lockdown as an employee working from home, your thoughts may be preoccupied with the current situation and may resort to unnecessary panic buying that can spike up your expenses for the month and leave you unaware of how your wallet is empty.
A wise decision would be not to panic but take a step back, assess the situation, and come up with bullet points on how to best deal with the tough circumstances ahead.
A flow chart of questions can help you with your assessment. Are your funds going into a savings account?
If you have been laid off, the following questions must come to mind: are you registered with a bank? And if so, have you been allocating funds into an emergency account such as a fixed or recurring deposit?
If the above statements are positive and in any ordinary case, it would be, your next step is not to break those funds in a state of panic. Your next steps would be to forecast the duration of your unemployment or work from home in order to properly allocate your funds and cast away the cloud of anxiety that is currently hovering over your household. You have nothing to worry about since you have the funds in case required, so let out that sigh of relief.
Calculate Your Expenses –
Once you have a firm estimate of the time period within which you must wait until you get employed, have a look at your expenses per month and assess your needs versus your wants in a month.
Classify your expenses into necessities and wasteful expenditure. Once you have successfully done so, it is wise to cut down on your expenses in a way that you can increase your savings per month in the bank as an investment for the future.
Find a Passive source of Income –
If you are working from home, you may want to take note of the following: another new source of income for you is in the form of expenditure on traveling and food while on your way to work at the office.
If you’re devised with some professional skills, there are dozens of good paying work from home jobs that you can freelance for. Also, all those expenses that have been cut short by staying at home are not to be ignored, it is a huge source of savings during this time, and it is ideal for you to recognize it and allocate them wisely.
Lower Your Credits –
Now coming to your credit, it may seem like the best option right now to ease the blow on your financial resources. However, it is important for you to understand an important fact: you must have the ready finances to be able to pay it back in the future when it is due.
Credit payments are unwise and risky since the future is uncertain, and the probability of you generating the cash flows in time for payment is not definite. Keeping this in mind, credit must only be made in an emergency for core requirements at the last resort. Now is not the time to make rash credit decisions.
Plan a Lockdown Budget –
As someone who is worried about their spending during this time, it is best to draw out budgets for the coming few months to ease your mind of any worries. This can also help you in assessing your expenditure in the above-mentioned steps and can help you identify where to cut down on the same.
At the same time, this lockdown can be viewed as an opportunity to diversify your sources of income. Your options can range from joining an online platform to give classes in an area of your expertise, take up additional work from home projects, surf the web on online employment platforms for any hiring that may pop up despite the trying times Any new source of income must be welcomed! Build your skills and portfolio at this time and come out stronger than before!
For Businesses –
If you are a businessman and find yourself in looming debt and the COVID-19 crisis has just about made things a hundred times worse, it is time for you to consult trustees and professionals that can ease you of your worries by determining your solvency before you let your anxieties get the better of you. There is always a brighter exit in a dark tunnel!
Don’t let this looming financial crisis get the better of you, and there is nothing to panic about if you have a clear head and a plan in mind. The best tips to ensure you are financially safe are mentioned in this article. Make use of these tips and ensure you come out of this crisis safe and well: physically, mentally, and financially.