(FinancialHealth.net) – The 2020 COVID-19 pandemic hasn’t been kind to millions of American families. The unemployment rate skyrocketed, according to ABC News, when states mandated shutdowns to slow the spread and the economic hardship started to feel more familiar. Just a decade ago, the country experienced the Great Recession. Fortunately, not only did we make it through that crisis, we can apply some of the lessons we learned to the current situation.
Here are three steps you can take to insulate your family during the global pandemic:
- Save, save, save. The Balance recommends that you save at least 10% of your income for retirement, but you should also be putting money aside for an emergency fund, says Vanguard. During the recession, people were out of work for a long time, and many went bankrupt. An emergency fund could save you if you have enough to cover 3 to 12 months’ worth of expenses.
- Pay down debt whenever you have a little bit of extra money. Start with the credit card or loan with the highest interest rate. That way, if you ever lose your income, you won’t also be drowning in debt as you try to find a new job.
- Find another income stream so you have something to fall back on just in case you lose your job. There are plenty of side jobs you can do in the gig economy these days, like rideshare or freelance writing.
Here are some more tips to prepare yourself for a recession:
As long as you’re making sound financial decisions, you can get through this. Just tighten your belt and ride it out. Remember, this is just a bump in the road to a brighter future.
~Here’s to Your Financial Health!
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