The impact of COVID-19 protective measures such as social distancing and limiting in-person contact has taken a toll on businesses, causing an economic downturn and many countries are facing a recession due to this pandemic. While these regulations are vital and put in place for everyone’s safety, it has impacted individuals as well. Here are some financial tips on what to do during this economic crisis.
1. Cancel non-essential subscription plans
These days, subscription plans are becoming increasingly popular. You can get a subscription plan for a huge number of things including music, entertainment, computer software, and even groceries! While convenient, subscription plans may cause you to spend unnecessarily with their recurring payment plans. Reevaluate your current subscription plans and check if they’re absolutely necessary.
2. Upskill to improve employability
Online courses, talks, and workshops are now more accessible as we shift from face-to-face interactions to online communication. With that, the world is at our fingertips, making it easier than ever to pick up a new skill or learn something new. Whether it’s a new language or branching into an entirely new field, this additional knowledge boosts your employability.
3. Make lifestyle changes
While many of us have undergone major shifts in our lives because of the pandemic, our lifestyle and spending habits require change too. With salary cuts and unemployment increasing, being mindful of how you’re spending your money and scaling back on your lifestyle is the smarter move. Instead of splurging on takeout, make yourself a hearty homecooked meal. If you find yourself turning to online shopping, turn off notifications for shopping apps and unsubscribe from their newsletters to avoid the temptation. Learning what to do with your money during a recession and knowing how to spend your money wisely can help you avoid debt.
4. Clear your debt
Outstanding debt is a slippery slope that could lead to bankruptcy when not managed well. If you’re getting into debt or having difficulty making ends meet at the end of the month, it’s time to reorganize your finances. Cut back on any unnecessary spending and focus on paying off your debts first. While it may be tempting to give yourself a treat once in a while, it’s important to keep yourself accountable and stick to clearing any debt or outstanding payments. After paying off your debts, you may just find your treat a little more rewarding!
5. Stay protected
When there are sudden expenses to cover, on top of dealing with an economic crisis, having a safety net to fall back on helps you live without worry. Having a savings or insurance plan provides you with the security you need in the case of unexpected expenses or loss of income.
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