Don't let crises affect your personal finances: How to make a plan to protect your money
Free Book Preview Money-Smart Solopreneur
Just a few days ago, the Mexican authorities were confirming the presence of the COVID-19 virus within Mexican territory. Confirmed cases in Mexico City, Coahuila, Sinaloa, the State of Mexico (and apparently in Puebla and Nuevo León), triggered both psychosis and panic shopping among Mexicans. The result was the shortage of antibacterial gel, vitamin C, and face masks in supermarkets and pharmacies around the country.
The government asked us to remain calm, commented that everything was under control. However, flights to and from Europe began to be canceled, the stock markets collapsed, Wall Street collapsed, the Mexican Stock Market stopped for the second time this week, Trump announced that the United States will not allow the entry of flights from Asia and Europe, NBA games were canceled, they are going to cancel the St. Patrick's Day parade in New York (which had not been canceled in 200 years) ...
It seems like a global crisis, or rather, it has already become one.
And among the worst things that can affect your personal finances, is the lack of preparation for a crisis. For the reasons mentioned above, I want to share with you a way to protect yourself by making your anti-crisis plan.
This plan will help you to be prepared in the presence of any risk (not just a pandemic or natural catastrophes).
Here I show you some tips that you should take into account to make your plan:
1. Have an emergency fund
You must have the cash that covers at least 3 months of your monthly expenses. In this way, if an emergency occurs, you will be armored and have cash available.
2. Life insurance
Everyone, absolutely everyone, is vulnerable to risks, and we are exposed all the time.
You cannot leave your luck and that of your loved ones to chance. Whether it's from a fall or a car accident, life insurance will help you absorb expenses.
I always say to my students: What would be more expensive? Pay for life insurance every month, or lose everything you've worked for in an emergency?
Well, there have really been people who have lost their assets because they had to pay for a hospital.
It may seem obvious, but I recommend having a supply store at home. Water, canned food, batteries, personal hygiene items, medicines ...
When there is a crisis or some extraordinary event, it is extremely common for people to make panic purchases, and destroy everything, or for stores to remain closed.
And, also, if you are lucky enough to find what you need, they will want to charge you much more than the real price.
4. Optimize your entries
Something that can affect you and your finances too much is the loss of your income.
If for some reason, during the crisis you lose your only inflow of money, you will have real problems.
For this, I advise you to have multiple sources of income, in this way, if something fails, you will not be left unprotected.
5. Stay informed
There is no worse enemy than misinformation.
In times of crisis, it is essential that you keep abreast of the most relevant events, and what is happening around you. Thus, you will be better forewarned and you will know how to act.
If you follow the points mentioned above, you will not lose balance when anything unforeseen arises. Do not leave what may happen to chance, take action and do not be surprised.