7 Financial Habits that can PREVENT during Crisis

One of the biggest crisis in history: the COVID-19 pandemic was detrimental to both people and businesses, causing economic losses of nearly trillions of dollars. Faced with this economic uncertainty that we experienced years ago, and as a preventive measure, here are the 7 financial habits to get ahead in times of crisis.

(1) Leverage Technology

Technology offers numerous opportunities to generate income. Some ways to take advantage of it are:

  1. E-commerce: Create an online store to sell products or services. You can use e-commerce platforms like Shopify or Amazon to reach a wide audience.
  2. Freelancing: If you have skills in graphic design, writing, programming, or other areas, you can offer your services as a freelancer through platforms like Fiverr.
  3. Creating online content: If you have knowledge or experience in a specific area, you can create online content, such as blogs, videos, or podcasts, and monetize it through advertising, sponsorships, or memberships.
  4. Mobile applications: Develop a mobile application that solves a problem or meets a specific need. You can generate income through advertising, in-app purchases, or subscriptions.

(2) Learn to Prioritize Expenses

Prioritizing expenses means consciously and strategically allocating and allocating your available financial resources, giving priority to those expenses that are most important or urgent. It involves making decisions on how to use money efficiently and effectively, focusing on the most important needs and goals. It is important to evaluate and classify different categories of expenses according to their importance and urgency. This involves identifying and covering basic and essential expenses first, such as housing, food, utilities, and health.

Then, you can consider other important expenses, such as education, savings, debt payments, and emergencies. It is also necessary to make sacrifices and give up certain less important expenses.

(3) Establish Your Own Rules

Establishing your own financial rules means defining and following personal guidelines for managing your money and avoiding exceeding the budget. By setting these rules, you can have greater control over your finances and make more conscious and responsible decisions.

Some financial rules to consider may include:

  • Monthly Budget: Set a monthly budget that reflects your income and expenses. Allocate clear limits for each expense category and make sure not to exceed those limits.
  • Automatic Savings: Set a rule to automatically save a portion of your income in a savings account. This will help you build an emergency fund and develop a consistent saving habit.

(4) Keep Track

If it’s difficult for you to control your expenses, keeping track can be a great alternative. You can write down how much you spend and in what category, whether it’s clothing, food, technology, outings, etc. Keeping track of your expenses provides greater financial awareness, helps you control your budget, identify areas for improvement, make informed decisions, and plan for the long term. It is a powerful tool for maintaining effective control over your finances and achieving your financial goals.

(5) Long-Term Planning

Long-term financial planning involves setting long-term financial goals and developing strategies to achieve those goals over time. It is an approach that goes beyond short-term financial decisions and actions, focusing on building a solid foundation for the future. It is important to set long-term saving and investment goals to achieve financial peace of mind and freedom.

(6) Have an Emergency Fund

A financial emergency fund is savings intended to cover emergency expenses. It is important to have a financial emergency fund for several reasons. First, it provides security and peace of mind in the event of unexpected situations, such as job loss, illness, or a family emergency. Having an emergency fund allows you to cover your basic expenses without having to resort to loans or debt.

In addition, having an emergency fund helps you avoid financial stress and enables you to make more informed and less impulsive decisions. It also gives you the flexibility to take advantage of opportunities that may arise, such as investments or career changes, without having to worry about your basic expenses.

(7) Diversify Your Income

Diversifying income reduces the risk of relying solely on one source of income. If that source is affected, such as losing your job or a decrease in income, having other sources of income can help maintain financial stability. Furthermore, diversifying your income can provide growth opportunities and increase earning potential. By having multiple sources of income, you can leverage different skills, talents, or assets to generate more income and increase your saving and investment capacity.

Income diversification can also provide greater long-term financial security. If one source of income becomes less profitable, having other options allows you to adapt more easily to economic changes and maintain a steady income flow.


Nikesh-Mehta-AllOnMoney

Hi, I am Nikesh Mehta, owner and writer of this site. I’m an analytics professional and also love writing on finance and related industry. I’ve done online course in Financial Markets and Investment Strategy from Indian School of Business. I can be reached at [email protected].


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