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Managing Personal Finances during the Health Crisis

Whether it’s the pandemic or your General practitioner alarming you of a sudden health crisis, money would be the first thing that comes to your mind.

Visiting a healthcare facility and getting special treatment to cure a disease is expensive.

Overcoming a health crisis is not easy and you’ll surely be challenged with managing your finances. Your financial management is your way out of the crisis.

Here’s a read on how?

1. Prioritize Saving

Experts believe this is where the problem starts. If you’re blessed with some extra cash, you may want to consider saving it. Say goodbye to extra drinks, parties over the weekend, and extravagant spending on clothing.

You may find it difficult to manage your financials if a health crisis takes place. Therefore, you must apportion some cash for your emergency fund.

According to Communication Clubhouse, “a person’s emergency fund is their first defense against financial calamities surfacing with a mental health illness. To ease the crisis, the person must have at least 3-6 months of cash to pay non-discretionary expenses.”

So, if you don’t have emergency cash savings create one today!

2. Appropriate Fund for Liquid Savings

Whether it’s a financial calamity surfacing from the loss of a job or a sudden health crisis, there’s no better way to protect your financial position than to have liquid savings. If you’ve managed to save some extra cash, make sure to pour some into acquiring highly liquid assets.

Short-term government securities are perfect. Certificates of deposits and other liquid securities would allow you to minimize financial risks even better. Don’t go for trading currencies or any kind of long-term investments.

Assets that cannot be turned into hard cash easily may not help you to shrug off a health calamity. So, make time and money to appropriate some cash for liquid savings.

3. Prepare Yourself for Online Banking

Health crises are not just the ideal time to move freely and carry out your financial transactions. Under a pandemic situation, it is better that you put yourself in a risk-free environment. You could check your bills and pay the same online and stay safe in your home.

The transaction fee for transferring money and paying bills has also been waived by most banks. So, you’re better off sitting at home. Plus, you don’t need to spend money to commute to and from the bank.

4. Plan a Budget and Stick to It

Planning a budget is something you must do on priority. If you are currently not keeping a track of your expenses and inflows, then you may want to think otherwise.

Without any proper planning of your monthly budget for expenditures to be done, you’ll end up having nothing in your emergency pocket. No provisions for emergency funds will expose you to greater health crisis risks.

Therefore, it is helpful to have a budget. What’s more important is that you try to stick to the appropriate budget.

5. Re-Evaluate Your Expenditures

The worst thing about the current health crisis is surviving this hire and fire policy adopted by most companies. If you’re lucky enough to survive, you may not be able to shrug off pay cuts. This is where the problem begins.

According to experts, it takes at least 6 months for a person to adjust their lifestyle to income cuts. However, this is a grave situation. You ought to take action as soon as possible. Here’s what you should do to avoid getting into debt;

  • Prioritize expenses and bills that are highly essential. These may include your rent, transportation, food, and clothing.
  • Cut on lavish aspects of your lifestyle.
  • Prepare a tight budget and monitor your bills closely to stick to the appropriate budget.

6. Pay Your Credit Card Bill in Full

If you’ve been affected by a salary cut or health crisis that is likely to hold you liable to pay for medical expenses over a prolonged period, it’s time to eye your credit card bill.

It’s highly recommended that you pay your credit card bill in full. First, by doing so you’ll free yourself from monthly obligations for paying credit card interests.

These interests are high in value and could consume a huge portion of your already tightened budget. So, it’s time to pay your credit card in full. Monitor your expenses and minimize credit as much as possible.

7. Find Ways to Earn Handsome Cash

The health crisis could consume a lot of your liquid savings and pose a serious threat to your financial stability. An unwanted pay cut is never welcomed.

However, since it’s the reality, you need to accept it. What you can do to break the intensity of the crisis is to work to find some extra cash. You may sell your extra possessions to get some extra cash.

You may also work more jobs. Some people have a side skill to generate small money. Freelancing is a good option too. You can continue these secondary jobs for some time to accumulate a good fund. You must find ways to generate this much-needed extra cash.

8. Re-Evaluate Your Insurance Cover

It’s also time to re-evaluate your insurance coverage. If it’s the most expensive one, you may just want to look for one that suits your needs and has a price you can easily afford. Since insurance is part of your non-discretionary expenses, you must tick this as your top priority to manage these crises.

9. Maintain a Good Health

This last tip is devoted to reducing the risk of the crisis fully. Yeah, you heard it right. You could solve the problem as soon as it surfaces. You can do it all by maintaining a healthy routine.

It’s good to be a workaholic. But, it’s smarter to pay attention to your health. Eat a balanced diet, exercise regularly, and have a good night’s sleep. You’ll minimize the risk of surrounding yourself with a major health crisis. Remember to maintain good health.

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