COVID-19 pandemic is hitting a lot of sectors and field around the world. Slowing businesses are dragging countries into recession. Meanwhile, people are also struggling with companies laying off their workers and daily necessities’ prices rising. To survive from a recession, it is important to manage your financial plan better. Read how below!
The first thing to note from your financial plan to survive from a recession: debt
The key to survive from a recession is by spending less. However, it is as important to finish your piling debts. Recession could elevate the interest, and eat more of the money that you need to use for daily necessities. Investor Junkie suggests starting from paying off credit card debt. Credit card is one debt with the highest interest. Consolidating your debt into one lower-interest loan is also a choice to take. Or, you can consolidate to credit cards with 0% introductory annual percentage rates. This will help you save money from being weighed by high interest.
Add more into your savings
Try to refrain from self-rewarding yourself for the moment. Instead, put more money into your savings. Investor Junkie recommends focusing on two savings: emergency funds and opening another saving account. Your emergency funds should be able to cover three to six months of living expenses. Opening another saving account with high-interest yield can really save yourself.
Other than focusing on your savings, you can also opt for finding a side job to do. But, make sure to put the money you get from the side job for savings only. Though this could tire you, it is also a great way to secure your money in an uncertain time.
Financial plan no.3: lead a modest lifestyle
The 50-30-20 rule will be a real lifesaver. Only spend 50% on your daily necessities, 30% on others, and the remaining 20% on paying off debts. Stay true to the rule, and you will be fine living through the recession.
Read also: India Falls into Recession After Decades
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