Uncertainty, such as conflicts, political unrest, and cases of Covid-19, are on the rise again and there are warning of possibility for exponential spread. That, paired with the continuation of the war in Ukraine and the fact that just over half of households, particularly in the United States and European Union, report that they’re still being impacted by the effects of the pandemic.
Many households around the globe have been hugely impacted by challenges brought on by the coronavirus. That’s especially true for young people, who may not have built up emergency funds quite yet or who may be navigating their first real financial challenges.
There’s no question the current environment has disrupted many financial plans and timelines — and the best thing we can do is to acknowledge this reality and adjust our future financial plan. In fact, not only is it important to make financial plans right now, but the best strategies to move forward are all about getting the basics of financial planning right.
The following are what you can do to set yourself up for success if you’re facing different financial situations in 2023.
How To Navigate An Unemployment Situation
If you recently suffered an employment setback, there are many time-sensitive steps that you can take after a job loss or salary cut, which can help you find your financial footing.
As soon as you find out about any planned employee cuts, check your employee handbook to see if you’re eligible for severance pay.Additionally, depending on the country where you live and work, you may be allowed to collect payment for unused accrued vacation time and sick days.
If you’re laid off without pay or partial pay, you may qualify for unemployment insurance benefits. That’s also true if you’ve received a pay cut or had your hours reduced.
If you’re unemployed, starting a part-time or passive income work can help you generate money by creating supplemental income. To find a side gig that works for you, think about what you’re good at. Maybe it’s photography, writing, tutoring, cooking or speaking a foreign language. Definitely, you can get paid for using those skills. Today’s virtual world has created even more opportunities to leverage skills you’d once consider a hobby in new, profitable ways.
But keep in mind that, as with any new gig, you’ll need to learn how to make smart financial moves, including making sure you prepare to pay taxes and watch profits.
How To Navigate Financial Goals
Even if you haven’t suffered any direct financial fallout from the pandemic so far, you may feel unsure about how to plan for the future or what to do with any savings you do have right now.
Use this moment to take a step back and recalibrate your financial goals, both short- and long-term, and figure out any changes that need to be made. Does that dream vacation fund that you had set aside, the costs associated with postponing a wedding, or buying a house should be put off for now? Should you still continue to save for the down payment?
If you’re not sure where to start, it is recommended that you lay out all of your options, plus the pros, cons and costs associated with each.
It’s a great tool to help you plan out your short-term and long-term goals and identify the best combination of steps to achieve them.
However, remember that your goals don’t have to be set in stone, especially during times of financial uncertainty. But it is important to identifying your priorities before you start planning a budget. Knowing that you want to reduce your credit card debt may make it easier to cut spending, for example.
Once you’ve recalibrated your financial goals, specific saving objects and adjust your expenses accordingly. You want to make sure you set aside enough each month to reach your goals.
It’s also important to keep track of your progress. Build time into your daily or weekly routine to check in on your goals.
Whether you’re facing a financial setback because of the pandemic or you’re just unsure of how to navigate all the uncertainty, one of the biggest missteps you can make right now is to just not doing anything about it.
It’s so important to lay the groundwork with actions like creating a budget, evaluating needs versus wants and assessing your debt to determine the right payment strategy. All of the above mentioned can collectively have a big impact on your financial situation.
Good luck.