There’s no doubt the COVID-19 pandemic is inflicting financial hardship on almost everyone. Families are struggling with job losses, pay cuts, investment declines and, sadly for many, unexpected medical bills. But Americans have an indominable spirit, and they will fight their way back to becoming whole again.
This raises the question of what does it mean to be financially resilient and what you can do to better withstand events that might negatively impact your income or assets. Here are some steps you can take to become more financially resilient:
1. Maintain adequate insurance coverage.
Work with a knowledgeable insurance agent to obtain protection for your home and vehicles. Evaluate your need for additional coverage such as life insurance, business insurance or an umbrella policy. Read this post to learn more about the types of insurance products that can protect you and your family in the event on an emergency.
2. Build emergency savings.
Even if you can only put away $50 a month, start saving for — or replenishing — that rainy day fund as soon as possible, even if it means temporarily cutting back on some luxuries. Read more tips on how to fund an emergency here.
3. Learn marketable skills.
Even if you still have a job, it’s important to make sure your professional skills remain honed and relevant in the current market. You can learn new software, for example, by watching YouTube videos or taking an online class.
4. Maintain professional networks.
While some may be uncomfortable about returning to in-person events, digital platforms can help you stay social, whether by connecting with recruiters on LinkedIn or keeping in touch with now-remote colleagues. In addition, some industry organizations are moving their events online, so it’s possible to keep up with industry trends from home and stay connected with people in your field who might help you find your next job.
5. Maintain a diversified investment portfolio.
The old adage of not putting all your eggs in one basket can help protect you should a particular sector of the economy face an economic downturn. Consult a qualified investment advisor about your specific investment goals and risk tolerance, develop a prudent plan, and stick with it over time.
6. Develop a healthy lifestyle.
Medical bills are the cause of a disproportionate number of personal bankruptcy claims. While some accidents and medical conditions are unavoidable, that doesn’t mean you shouldn’t do what you can to stack the deck in your favor, when possible. Eating right, exercising, quitting smoking and drinking in moderation might help you avoid a costly long-term health condition or improve your chances of recovering more quickly from COVID-19.
7. Cultivate a positive mental outlook.
Sometimes persistence is needed to get things back on track. Believing that your efforts can lead to positive results is the key to persistent effort. Think back on other times of adversity in your life and how you turned the tide in your favor — even if the main thing you did was just being patient.
8. Learn how to manage stress effectively.
Stress can negatively impact your physical health and mental outlook. Recognize when stress is affecting you and choose healthy coping mechanisms, including meditating, journaling, leaning on friends and family for support, and seeking professional counseling. Finally, if you’re frustrated about current events, it’s OK to take a short break from news shows and social media if it’s fraying your mental health.
9. Pay down debt.
Debt is an anchor that can keep you stuck in place and make recovering from financial adversity more difficult. Make an accounting of all your debts and come up with a plan to pay them down. Read more about how to manage debt during a crisis in this blog post . AutoPayPlus can help you come up with a plan for accelerated debt pay down and stick with it by making payments automatically from your checking account. You’ll avoid late fees, clear your debts faster and save on interest payments over the life of your loans.
10. Maintain good credit.
Many people need to rely on their credit lines during a crisis — whether it’s their credit cards or a home equity line of credit (HELOC). And, your credit worthiness will determine what it will ultimately cost you to access that credit in terms of your interest rate. One of the most important things you can do to protect your credit is pay your bills on time. You can read more about protecting your credit here.
The COVID-19 crisis is challenging most people right now. Those who are financially resilient can mitigate more damage and recover faster. AutoPayPlus is here to help. Call us today at 800-894-5000 or click here to sign up. If you’re already a member, speak with one of our representatives to make sure you’re taking advantage of all the features of the program
We’re all in this together, and together we can overcome just about any challenge.
10 Tips for Financial Resilience
1. Save a little each week.
Even if it’s just spare change, make a commitment to add to your savings whenever possible.
2. Review your insurance policies.
Protect yourself with good quality coverage from a highly-rated carrier.
3. Update your resume.
Even if you’re currently employed, make sure your resume is up-to-date and ready to send out on a moment’s notice.
4. Practice good self-care.
Manage stress, eat and sleep well, and stay socially connected so you can put forward your best efforts during a crisis.
5. Seek professional advice.
If your employer gives you access to a financial advisor, set up an appointment to review your personal finances and investments.
6. Update your LinkedIn profile.
Craft a well-written bio and build your professional network in case you lose your job.
7. Pick up a new skill.
Identify and work on building at least one marketable skill that can make you more attractive to a potential employer.
8. Read about others who’ve overcome financial adversity.
There are many biographies about people who have found greater success after rising above a financial hardship. Learn from their stories.
9. Review your portfolio.
Make sure you’re well diversified and invested appropriately for the amount of time left until you intend to retire, or need to access your investments.
10. Invest in your financial literacy.
Read books, blogs and articles about your industry, investing and personal finance.