Uncertain and unstable financial times are a great reminder of why we can’t take our financial security for granted. Having a strong foothold for your personal finances allows you the confidence and comfort to weather the challenging times and thrive during the better times. Rather than panicking about your financial well-being, be prepared by taking these measures to protect your money.
1. Better Your Budget and Build Savings
As simple as it may sound — the path to a stronger financial future begins with a better budget. Most importantly, you need to analyze your spending habits. Take a look at online tools that allow you to track and monitor all incoming and outgoing cash. If you are more spreadsheet-inclined, you might want to create a budget worksheet. Once you’ve compiled a couple months of spending activity, you can identify areas that you can cut down spending. Commit to dedicating that money into your savings fund. By having an extra $1,000 or so set aside, you’ve taken the first step to safeguarding your finances.
2. Work on Your Credit Score
One of the (few) advantages of social distancing efforts is that it gives many people the ability to cut back on some expenses and pay down debt. By doing less, we can save more. If your income and finances have been adversely affected by the current public health and economic crises, make sure to contact your credit card issuers about possible payment relief options. You may even be able to receive a credit line increase, which could help to improve your credit score by lowering your utilization rate — just be sure not to take advantage of the increased limit by using your credit unnecessarily. Improving your credit score can allow you to have access to credit at reasonable rates, which is another important component to safeguarding your finances.
3. Look for Additional Sources of Income
Job security isn’t the only reason you should always aim to have more than one source of income. Having multiple personal revenue streams is a great way to get ahead and have some money that doesn’t need to be allocated to immediate needs or debt. Some ideas for starting your side hustle include selling items on online marketplaces, taking surveys and driving for rideshare companies. By bringing in some extra cash, you can relieve some of the financial pressure you have to stick to your budget.
4. Make a Backup Plan
If this year has taught us anything so far, it’s the importance of preparing for the worst. While we should always hope for and work for the best, knowing what you would do in the event of a lay off is another way to safeguard your finances. Action for this measure can be as simple as updating your resume and LinkedIn profile. Keep an eye out for networking opportunities, and try to take on projects or activities that could align well with your next role.
5. Bolster Your Digital Presence and Be Mindful of Your Paper Trail
Safeguarding your finances should also be addressed by taking greater security measures for all of your personal and financial accounts. You can start by signing up for credit alerts that notify you if your spending is too high or if a new account has been opened in your name. Make sure detailed personal information isn’t publicly accessible on social media, don’t share passwords and make sure the passwords you do use are long and strong. Additionally, go paperless wherever you can with your financial accounts, and use a shredder for any papers containing important personal information that you do receive. By taking proper and proactive precautions now, you can protect yourself from financial woes in the future.
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