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The global economy has declined over the past two years due to the lingering pandemic, more significantly through 2022, amid high inflation, uncertainties from the Russia-Ukraine war and vigorous monetary tightening. The soaring prices for basic commodities have triggered a global cost-of-living crisis, causing financial strain for many households and individuals.
According to the International Monetary Fund (IMF), slowing global economic growth is increasingly evident as per high-frequency data. The latest statistics found that the global growth forecast for next year has lowered to 2.7 percent, indicating a gloomy outlook. Amid this exceptional uncertainty, people are unsure what to expect in this new year. If you’re struggling to keep up with rising costs, you’re not alone in this slippery slope. Consider implementing the following strategies to protect your finances and reduce stress in the upcoming months.
Maximize Your Liquid Savings
Liquid savings, such as your cash, checking, and savings account, will help you most during a financial crisis as the value of these resources doesn’t fluctuate with the market conditions. Stocks, index funds, exchange-traded funds (ETFs), property value, and other financial instruments you might have invested can change with market conditions, leading to financial uncertainty.
Avoid investing too much money in stocks or other high-risk investments until you have an accurate idea of the market conditions and have sufficient liquid cash savings. Take out your investments if they are favorable and put them towards your liquid savings. Your liquid savings will ensure you have enough funds during emergencies, which is especially beneficial in today’s fragile economy.
Carefully Manage Your Bills
Being organized and paying attention to bill payment deadlines can save you from hefty fees and penalties. One late payment can set up back a few hundred dollars annually, so it’s best to be organized to prevent that from happening.
Set a date to review your bills each month to prevent missing due dates. This will allow you to note when all your bills are due to avoid late payments. You can also pre-authorize your bills or automate payments if your schedule doesn’t allow you to review your bills each month.
If you have trouble paying your bills or loans or paying on time, there are options to reduce your burden. According to the Consumer Financial Protection Bureau (CFPB), reaching out to your lenders or creditors early can help you learn about programs that lets you pause or reduce payments temporarily. Similar options may be available for Canadians, and you can find out about them by reaching out to your service providers and lenders.
Get a Short-Term Loan
A short-term loan allows individuals quick access to cash when they need it most. Platforms like FlexMoney offer a simple application process, allowing you to skip long wait times at the bank and get a loan quickly. This is highly beneficial in emergencies that may occur in today’s market conditions. If you don’t have enough money to deal with sudden price changes on basic commodities, lose your job, or receive an expensive medical bill, a short-term payday loan is your best friend.
Short-term loans are typically small amounts that must be paid within a year. However, when you consult a reputable lender, you can discuss your payment options and customize your loan based on your individual needs. You must do your calculations accurately and learn all the borrowing terms to avoid penalties. The benefit of FlexMoney is that they are transparent about their fees, saving you from the stress of dealing with hidden charges that can disrupt your financial health.
The current economic situation is taking a toll on many individuals and households, but proper planning and execution can reduce the burden. Follow the tips above to protect your finances and maintain your financial health this year.
