How to be Prepared for Your Next Financial Crisis?

We all have been hearing about financial crisis but before the Covid-19 pandemic, every person you interact with and ask for a good example of a financial crises state, they would give the 1999 dotcom bubble or the 2008 housing recession as a very good example, nobody ever thought of a situation that could lead to everyone staying indoors and closing down several means of earning, nobody thought about Covid-19. With this, it is evident that one has to prepare for an unforeseen future financial crisis and in this post, I will be sharing how to prepare for a future financial crisis.

image credit

Reduce/Eliminate Debt:
Debt are of two types, the good and the bad debt. A good debt is gotten to attend to things that will bring in more money to pay off the debt, its interest as well as have money to do other things while bad debt are debts that aren't going to be used to grow wealth, and in so many cases, there are survival purpose or gratification debt. At this point, I am certain you already have a pile of debt incurred already but you can use this period to start reducing them until you can eliminate the debt completely. You need to stop the unnecessary swiping on your credit and work on building your financial strength.

Invest both in Safe Assets
Unlike investing in stocks and bonds, there are assets that are immune to personal financial crisis and while you are investing in the major market and the investment world, be sure to invest in assets that cab be made liquid easily and will not affect the net worth if there is a crisis.

Start to save for emergency
Your future is in jeopardy if you do not have enough funds in savings for emergency at least to live and survive daily for 6 to 8 months. you need to start saving for rainy days and days when you might not receive income for about 6 months before things get back to normal.

Spend Frugally
A penny spent is a penny lost if it isn't giving the right value but a penny spent wisely is a penny gotten in value. You need to start learning how to live frugally and how to understand that you should balance between your spending and saving as well as reduce wastage.

Conclusion

Be sure to reduce all your expenses and increase your income stream. If you still have one income stream, then you are one step away from bankruptcy but when you increase your income stream, you are certain to have a safe finance.