The pandemic crisis is causing a lot of stress, mainly due to financial instability. In the face of uncertainty, it’s okay to be worried about your money. While it’s impossible to control everything, here are some things you can do to lessen the impact of this challenging situation and improve your financial situation.
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Know your fixed expenses
Whether you are self-employed or a company employee, it is always essential to have an excellent knowledge of your monthly fixed costs.
A priori, we often tend to minimize them, and when we start to sum them up, we can reach fixed charge ratios greater than 70% of total charges. At this stage, it is then normal to feel “suffocated” by the weight of these expenses.
To correct the situation, you sometimes have to question a lifestyle that is unsuitable for your income.
Pay your high-interest debt first
Of all the payments you have to make, which have the highest interest rates? Probably those from your credit card balances. If you have to choose from different debts to pay off, start with them.
Why? Simply because credit card debt is the most expensive in terms of interest charges and penalties. Ideally, pay your monthly balance in full before the deadline. If you are too tight to get there, pay the minimum requested. It’s not ideal, but it’s better than nothing.
Assess your monthly expenses
Your salary is monthly, so are your expenses such as taxes (on income, property tax, insurance premiums, condominium fees.
Monthly payment of ALL fixed costs seems to us to be the optimal solution. It saves you an unnecessary mental burden and puts you in front of your financial reality as soon as possible (and not in December, when it’s time to fund the holiday season).
Savings as a financial shock absorber
Savings are a fundamental tool and a very relevant indicator of financial management. That part of your personal finance management is essential for covering the vagaries of life, anticipated constrained expenses that would not be paid monthly, your medium-term projects (vacations, car changes, professional retraining, real estate projects).
Savings are a kind of shock absorber that allows you to offset any financial variations you may encounter, both in terms of income and expenses.
Make your banker an ally
We recommend that you maintain a healthy and regular relationship with your banker. You might think that hitting the right bank advisor is more a fluke than a management choice, but we don’t really agree.
You should see your banker as a service provider (financial in this case). It’s your true partner with whom you can maintain frank and useful communication in the service of your financial situation.
Your banker will thus be more inclined to offer you financing solutions adapted to more strained financial situations.
Start trading online
Whether you want to improve your financial situation or to make you already have decent capital to grow, trading online comes as a great opportunity. Here it’s about gaining a thousand dollars once you reach some proper skill level. Among the most lucrative and popular online trading options out there are trading currencies. This kind of trading doesn’t impose the necessity of being an expert.
Moreover, a multitude of free learning tools and materials are available on Forex brokerage platforms. Before you are entirely sure that you have enough knowledge about the market, practice on a virtual account. Over time, you will be able to master many trading strategies, and why not commit yourself to trade like a professional online currency trader.
Set aside at least 10% of your income each month
As we said earlier, savings are an essential shock absorber to your financial stability. We often find that our lifestyle quickly adapts to our income. But the ability to save money has to be worked on! Setting aside at least 10% of your income each month must be your priority.
It takes some effort to “break” the routine consumption that you may have settled into to regain a savings capacity that will allow you to carry out your spending or investment plans.
All said may seem difficult to reach, but once you set your budgeting routine, you will see a positive change in your account balance very soon, allowing you to live more comfortably and stress-free.