More than 15 million Americans have lost their jobs due to COVID-19, and they are only part of the vast number of citizens that are struggling financially due to the virus.
Even people who are still working have faced pay cuts, reduced hours, or lower workloads. Executives from companies that range from Disney to Marriott have taken reduced salaries, and it’s affected the day-to-day workers as well.
If you’re one of those affected by this crisis, you may wonder how to survive economically, as well as what you can do to prepare financially for the next crisis.
Here are some tips and tricks that will help ensure you not only survive… but thrive.
Have Multiple Avenues of Income
Diversifying your income is an important part of staying safe in crisis. Many people have side-hustles to provide additional income, but during COVID-19 those side-hustles have become main hustles. If you have a full-time job, think about how else you could earn money. Do you have a talent? A few hours a week you could work a part-time job?
It’s important as you look at additional income opportunities that you’re honest with yourself and avoid scams. For instance, multi-level marketing companies claim to offer a side income, but you spend much more than you make. If you have to recruit others to earn significant money, skip it.
On the other hand, a side job at a place that’s considered essential, like a gas station or grocery store, may just be the place to get extra hours or even full-time work in a time of crisis. If you choose your side jobs carefully, they can make a big difference in difficult times.
You can also start a business that provides side income, such as being a freelancer. If you do take on a business, be sure you get appropriate accounting advice for both your taxes and your day-to-day operations. Even a small business qualifies for a variety of deductions and incentives. Have a side business or a side job allows you to build creativity and flexibility into your long-term planning.
Be Aware of Assistance Programs
If you lose your job or see a significant pay change due to COVID-19, there are a variety of programs that can help. Unemployment pay may be available for you, and you can explore relief options with your creditors. In extreme cases, you may decide to file for bankruptcy.
However, you aren’t able to use programs unless you know they exist! It’s vital to keep up with news and announcements and to apply for relief right away. Unfortunately, public financial packages are exhausted quickly and often operate on a first-come-first-serve basis.
You may qualify for specific relief due to your demographics. For instance, the Small Business Associations (SBA) has loans specifically for women-owned businesses. Don’t neglect your financial planning simply because you’re female or a minority. There are specific options just for you!
Learn to Manage Your Money Well
You can earn or qualify for a lot of cash, but it won’t do you any good if you don’t know how to hold on to it and use it wisely. The basics of financial literacy are a good place to start. You can learn about earning, debt, and savings, and how to be wise with each one.
Immediate Steps to Take in a Financial Emergency
When you are in the midst of an actual emergency, whether it’s COVID-19 or another issue, first assess the situation. Is it short-term or long-term? Do you know when it will end? What can you do to resolve the problem and return to financial normalcy?
Next, focus on limiting your spending. Prioritize each of your expenses and decide what should be paid first. You might be able to cover all of your bills, but even so, knowing which ones you can let go will reduce your stress.
From there, negotiate with lenders and access financial aid that’s available. Don’t wait until you start getting threatening letters. Instead, be proactive and let your utility company, creditors, and others you owe know what’s going on.
Long-Term Financial Habits
Once you’re no longer in an immediate crisis, it’s important to create long-term good habits that will help you stay financially successful.
It’s important not to simply daydream about making positive changes in your budget, but to actually do it. It’s easy to imagine that you’ll get fit in the future, save money in the future, and so on – but the future never comes! It’s best to start today. Create a budget to get a handle on your expenses, and stick to it.
You can also review what you pay for and work to pare down. Perhaps you don’t need premium movie channels or want to cancel the gym membership you never use. Most of all, find a way to create an emergency savings fund that you can use if a crisis hits again.
Being Financially Prepared Pays Off
You might think that managing your finances sounds terribly dull, but in fact, being aware and in control of your money makes life a lot easier. You’ll have a lot less stress day-to-day, and you’ll also be more prepared when a serious problem arises.
You never know when a crisis will occur. Whether it’s a sudden job loss, a relative who needs your help, or a worldwide pandemic, crazy things happen all the time. When you’re financially prepared, you’ll be able to not just make it, but truly thrive in any condition.
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