How do you keep your bearings, keep out of debt, and stay financially healthy during the unprecedented chaos of a worldwide pandemic?
1. Be even more careful and responsible than usual with your spending. Cut expenses where you can. Focus on the essentials, and make a commitment to yourself to avoid buying anything you don’t really need.
2. Create a budget and live by it. Now is the time to really get serious about this. Living beyond your means is a slippery slope that is hard to recover from. Not sticking to your budget and building debt are among the worst financial mistakes you can make.
3. Don’t let the fact that these are hard times lead you to accumulate debt. Carrying debt may hurt your credit score, and if the economic crisis continues and deepens, your credit score will become even more critical.
4. When you pay for things, pay with your credit card, not your debit card. A debit card may seem like a smart way to avoid falling into debt, but it doesn’t build your credit score. In times of crisis, your credit counts even more than it usually does in non-crisis times. So, you want to continue building your credit score, and the most efficient way to do that is keep using your credit card.
Just remember to pay off your card on time every month, and pay it more than once a month if possible. This will build your credit score and give you an advantage when it comes to receiving better offers in the future.
5. Don't neglect your retirement savings. Use a 401k or automatic savings plan to steer a portion of your paycheck to savings. It may feel like you can’t spare any part of your income right now, but you won’t miss it and it will grow over time.
6. Focus on what you can do, and do it well. When you are under financial stress, it’s easy to be distracted by things you can’t control, but that’s not productive. Concentrate on doing amazingly well in your work and you may be surprised how well your finances will reward you.
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