September 14, 2020Financially Preparing for the Unknown
Predicting the future down to every detail is impossible. Now more than ever, people are questioning the future of their health, finances, and careers. We understand this is troubling.
One lesson you can learn as you look ahead is how prepared you are for financial uncertainties. Many events in life are unpredictable, but you can plan financial stability through sudden setbacks.
Here are a few tips to help you plan for the unknown and improve your current financial life:
Stick with Your Savings Plan.
If possible, keep working as much as you can. If there are other opportunities to earn extra money during this time, go for it. Then, save all you can and limit unnecessary spending. This will help you build an emergency fund.
While it may be tempting to spend your stimulus check, put it into savings instead. Since the future is unknown, it’s better to have emergency funds to fall back on if something happens. Opening a special savings account now may prevent big headaches later.
Pay Off Debt.
Right now, you should start paying off your loans in a logical, systematic fashion. The less debt you have, the easier it is to negotiate with creditors if you need to do so.
- Pay off credit cards with high interest. A balance transfer to a lower interest rate might help, too! (I hope to have a balance transfer page by the time this is published).
- Pay extra each month towards the principal if there is no penalty to do so. You can schedule these payments using electronic bill pay to avoid late charges, too.
- Keep chipping away, even if things look better until you erase the debt.
- Avoid adding new debt, if possible.
Only Seek Assistance If Needed.
Most financial institutions are offering generous financial relief programs to those in need. However, many of these are one-time-only opportunities. If later shutdowns become necessary, they may not be available if you took advantage of them this time. It is important to assess your current financial position and apply for these programs only if needed.
Also, you must read the fine print if you do take advantage of these opportunities. Some of the loan forbearance programs and other “safety nets” require lump-sum payments once the forbearance period ends. Failure to understand these programs and repayment plans may cause other financial challenges in the future.
We’re Here to Help!
We understand there is a lot of uncertainty, financially and otherwise, in the world today. That makes it even more important to save when possible. As a member, you have access to a variety of products and tools to manage your savings more efficiently, including savings accounts, automated transfers, and more.
To learn more about the financial relief programs available through the credit union, please contact us at (800) 226-6673 or stop by any branch location. We’re here to help you live your best financial life.
Each individual’s financial situation is unique, and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.