Learn From The Covid-19 Pandemic To Improve Your Finances
The coronavirus pandemic took everyone by surprise. Nobody wanted it and it has caused havoc with everyday life. But there are some good lessons that you can learn from the pandemic that will help you to improve your financial situation in the future.
You need to do everything that you can to protect your family during these difficult times. But you can also take steps to improve your financial position by taking the right steps. Don’t wait for the coronavirus to have a negative impact on your financial future. Take action by following the steps we suggest here.
Avoid the Tendency to Charge Everything
In uncertain times like this you may be tempted to pay for everything using your credit cards. When you charge everything you will increase the balances on your credit cards and this will make your credit utilization ratio higher as well.
Falling back on your credit cards during a pandemic is a natural thing to do and many are doing this. But at the end of the day it does not help your financial situation. You may not have a lot in savings to fall back on so it is better to question whether you really need to use your credit cards as much as you do.
Most creditors are allowing people to defer their credit card payments for a while. It is possible to get a deferment up to six months ahead these days. The trouble with this is that at some point you will have to catch up with your payments. You don’t know what is going to happen with the job market in the future so it is not a good idea to increase your credit card debt.
Take a good look at your Current Expenditure
Take a look at all of your current expenses with a view to paring them down. You probably have a number of expenses that you can eliminate. Rather than ordering take away food often, why not cook something in your own kitchen instead?
It is always a good idea to be in control of your money and it makes even more sense during this pandemic. If you are finding things difficult then the best thing to do is to face your creditors. The stress of receiving those phone calls can be too much to bear.
Get your Finances Back on Track
So here is a proven way to get back on track from a financial point of view:
Write down all of your regular payments by the due date. Be sure to include all of your bills as well as your credit card payments and any other lines of credit that you have. This will immediately make you feel better.
Take a look at the interest that you are paying. If it is too high then contact your creditors to negotiate the interest rates. You will be surprised how willing they are to discuss this with you. Change your mindset here to believe that everything is negotiable and that your creditors will always prefer to receive something rather than nothing.
It will be unusual for you to find any creditor that is not willing to re-negotiate interest rates at the moment. The coronavirus is affecting their business too and they know that they need to work with their creditors to help them as much as they can.
Typical Responses from Creditors
You might find that a creditor requests that you make good faith payments for around three months. They will usually request that you make a small payment during this time. If you are offered this arrangement then you should accept it.
Sitting at home stewing over your finances is not going to help you at all. You need to face the problem and take action by contacting your creditors. When you speak to them, do so with confidence so that they know you are looking for a workable solution that will benefit you and them.
Some creditors may suggest that you take out a debt consolidation loan to pay off your credit card balance. This is not the worst idea in the world and you can find many different options for this online. Most creditors will not suggest this and will be happy to discuss reducing interest rates to help you instead.