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The opinions of the employees of s You are personal.
The way we deal with money has changed in a snap due to COVID-19, which threatens to spend a long day restricting our behavior. The orange light has arrived in Mexico City, but measures such as voluntary quarantine will continue to rock the economy, and the accelerated job loss in the past three months will continue to make millions of people think twice a day. Time to manage money and especially expenses in the same way as before.
The good news is that personal financial information has never been so close, and today anyone with an internet connection can develop their own strategy. However, these tips are not just for those who have no income. There are others who have recently received tax, bond and profit refunds, and are also wondering how best to secure and increase this income. Not to mention those who feel that their work may be at risk and want to start drawing up an emergency plan.
The first thing a person should question is whether it really is necessary for them to repay all of their debts as soon as possible. Try to pay off all of your debts so that you no longer have to make monthly payments. However, this is not always good advice as it can leave you quickly without liquidity and liquidity is required as it will support you for months without income when you get out of the crisis.
Let’s look at some other tips that can help you develop a strategy for managing your money in the New Normal era, in which we need to learn to deal with the disasters caused by COVID-19.
1. Keep your job
Photo: shironosov | Getty Images
It sounds easier said than done, but it is extremely important that you remember it if you want to quit today. The main goal of keeping a job is to get a privilege that is becoming increasingly rare in the world: to get a fixed income. Whether your company cut your salary or you keep it full: try to keep your job.
Unfortunately, this is not a good time to start this “own business” unless it is supposed to cure the corona virus or solve one of the new problems it caused. Unemployment is growing day by day and is expected to worsen. This means that it is a good time to practice acceptance and serenity and to negotiate an agreement with your boss that works for everyone.
Do not in any way accept humiliation or ill-treatment from your employer, because this is not the concept of strategy, but keep your job as good as possible, be it negotiating with your boss or suggesting new ideas for diversifying the business. May the paradigm shift to survive.
2. Make a “war budget”
If you’ve already lost your job, worked or earned only a fraction of your earnings in January, or suspected of being fired, it’s time for you to draw up a “war budget”. To do this, you must sincerely calculate how much money you have from now on and until the situation changes.
Calculate the resources that are available to you while restoring your normal job or looking for a new one. It is not appropriate to be optimistic at this point. Add up all the money you have (liquid, we borrow or credit cards don’t). Add your savings and help from family or friends. Also add your salary if you have.
Then make a list of all the expenses you have and start reducing them. There are two techniques for this.
First technique: Reduce unnecessary and small costs that you can bear without them. B. Luxury (e.g. expensive groceries or branded products), memberships (e.g. only a subscription to streaming TV), clothing and accessories.
Second technique: Ramit Sethi says that the technique of reducing small expenses is nonsense and suggests starting at high costs so that you get what he calls. “Big wins”, Such as selling something big that represents a large amount of money in your pocket (a car, a Thermomix, a designer bag, etc.). Ramit gives this advice in a different context, but it’s an excellent technique that can help you a lot right now.
After choosing a strategy, divide your money and total fixed income by the number that your war budget poses, so you know how many months you have enough with what you have and whether you need to think about financial support to ask.
3. Check the office and your credit score
Photo: Courtesy of Coru
Everyone should know the status of their credit history, but if you haven’t already, now is the time to do so. Checking your creditworthiness and history is so easy that there is no excuse for not doing so.
In your office you can check how many credit accounts you have open and the status of all your debts. There are several reasons to become an office enthusiast now. One is that thieves and opportunists have taken advantage of the confusion to steal data and open loans on behalf of other people, and another very important reason is that banks are tightening their profile processes to protect themselves and loans only To forgive people. This means a low risk, which means that you are more likely to pay on time. This is calculated based on the profile and creditworthiness.
At Bancompara, we have spoken extensively about the importance of keeping a good record, as these are not the only reasons.
One of the main reasons for maintaining a good balance sheet is the ability to financially survive a contingency through credit capacity. In this way you can, for example, cover a hospital stay or an unforeseen event. Keep your lines of credit open if you need a liquidity loan, personal loan or new credit card.
If you find that your score is very low, improve it.
Take care of yourself Result Credit now and it will return the favor when you need it. Don’t neglect it: Pay your debts on time or neglect them at the bank. Don’t go away with the monthly payments as this affects your history too much.
4. Negotiate with the bank
The bank will not suspect that certain people cannot pay their monthly payments. You have many customers and will follow the protocol: after a certain period of non-payment they will report you to the office. If you’re having trouble paying monthly payments, the best thing to do is call to arrange a payment program with an advisor. Many people think that they will not report them or that reporting a debt in the office is not so serious, but it is serious, especially if you will need a line of credit to cover an emergency in an excellent deal in the future to invest or buy a family home.
Banks continue to offer funding and renewals to all citizens who request it. If you have good credit, you may be able to refinance your debt at excellent interest rates.
If you have received a large amount of money that you did not have, do not pass it on to the bank to pay a single debt. This is not a good idea unless you have your accustomed income in a secure job for years. This is not a good idea because you are running out of liquidity (enough and available money) to cover current expenses and unforeseen events that still cause you to be in debt. Plus.
Pay off all your debts. If you don’t know if your income is stable, this may not be a good idea. If you are unemployed or have less income and have received a large sum of money, make your minimum monthly payments, avoid the office and keep your liquidity until you have your normal monthly income again.
5. Get liquidity through your assets
This means that if necessary, you can process a liquidity loan with a mortgage guarantee: with your house as security.
If you lose your job or reduce your income, your payment obligations won’t stop: schools, kindergartens, gyms, insurance (urgently needed), cable TV, the necessary internet and other memberships. You also have to ask for the supermarket and pay for the services. Life goes on, but income doesn’t.
6. Consolidate your debts
In point one, we propose the idea of creating a new budget. Before and after, however, you need to consider debt consolidation. This is exactly what good credit is for, because the better it is, the better the interest rate will be given to you when applying for a loan that will allow you to pay all your debts and make lower monthly payments as long as there is an emergency or you have better employment opportunities.
It works very simply: look for a personal balance that will allow you to pay all your debts and keep only one, lower, longer-term and better interest rate. This reduces your monthly payment and gives you a break, as these debts can even be funded for up to five years.
If the plan works, it should look something like this:
A. You make up the sum of all debts you have between personal loans and credit cards.
For example, 100,000 pesos of debt divided into 3 loans.
Personal credit = 30,000
Card a = 35,000
Card b = 35,000
B. Calculate what you pay monthly for these credits.
Personal credit = 2,500 per month
Card a = 6,000 per month
Card b = 6,000 per month
Total monthly payments: 14,500
C. You are looking for a personal loan for the total amount of your debts from step 1 for as many years as possible. They make sure you get a good price.
Personal credit of 32.2% per year x 5 years = monthly payments of approximately 3,800 pesos.
D. With the loan money from step C you pay all your debts from step A.
E. You pay 3,800 pesos a month, a difference of 10,500 pesos from what you previously paid.
Q. You will no longer use your credit cards unless it is an emergency.
G. If your economy improves, make extraordinary payments on your new balance and pay it in a much shorter time.
You can also buy your credit card debt with another credit card that offers you a cheaper rate. This will be a relief for your economy in the short term.
This is how debt consolidation works.
Once you have released your credit card quota, do NOT continue to use them.
On the other hand, if your income has not been cut and your work is not in jeopardy, it is not a good idea to use card refinancing in the longer term as your interests increase and refinancing does not make sense if you have already paid more. half of your card debt.
7. Check all sources of money that you have not considered before
Review all of the rewards and points they give you without you knowing. Like miles, credit card points or bank rewards because they can help a lot at this point.
These seven points will help you manage your personal finances now. Think twice about all your financial decisions and get expert advice. These are very uncertain times and it is not time to take risks with the money that guarantees our survival.
If you don’t have one yet, work in an emergency fund that serves as protection in future similar situations: it gives you additional security. Emergency funds help people secure their prosperity and health.
Always think about the future when it comes to personal finances. Emotionally, the best thing you can do now is to protect yourself and live day after day.