5 Tips for Protecting Your Finances

Happy couple looking at laptop in kitchen

Throughout COVID-19 and its accompanying economic challenges, we've been kept on our toes — and, sometimes, put back on our heels. Every time it seemed things might be getting better, along came a new wave of infections and repercussions. Schools and businesses tried to reopen, then shut down again as governments sought to balance the need to preserve public health against the threat of financial disaster.

Protection will be the watchword again this year, both in terms of our health and our finances. The two will continue to go hand-in-hand for the foreseeable future, so what can we do to safeguard our assets as we wade through this next period of flux? Here are some strategies to consider.

Protect your health

Health care costs can take a big bite out of your budget, so one of the most important steps you can take to maintain your fiscal stability is to stay healthy. Make sure your health insurance is up to date. Check with your employer or sign up for the Affordable Care Act (by executive order, a special enrollment period at healthcare.gov is open through May 15.)

Of course, the best medicine is preventive care. Be sure you:

Eat healthy foods. Check the USDA’s nutrition guidelines, consult with your doctor or dietitian, and tailor your diet to your personal needs.
Get enough sleep (7 to 9 hours a night for healthy adults), and make sure your sleep patterns are consistent. Cut out caffeine, especially before bed — when you should also avoid alcohol, turn off your TV, and stop scrolling the net.
Minimize stress. Light candles, meditate, listen to soothing music, laugh, take deep breaths, and spend time with your furry friends.
Get vaccinated as soon as you can; keep masking up; sanitize your hands; and frequently used surfaces; and socially distance.

Make more money

Look for opportunities to expand your income. Does your employer offer overtime projects? Take advantage of those (but be careful not to burn yourself out).

You can also adapt to changing workplace values and priorities by seeking new training opportunities, either through your company or on your own. Explore online options, night classes, or mentorship programs.

If you’ve hit the ceiling with your employer, look for options to make extra money on your own time. Sell stuff on eBay or Etsy; offer delivery or cleaning services in your off time; rent out your RV when you aren’t using it (making sure you sanitize it fully beforehand and afterward).

Spend less money

While you’re trying to maximize your income, minimize your spending by taking inventory of your budget and finding places to trim expenses.

Buy energy-saving lightbulbs and shop for Energy Star appliances.
Keep your thermostat set around 68 when you’re at home during the winter, and 62-64 when you’re out of the house.
Increase that to around 78 in the summertime, or 88 when you’re away from home.
Eliminate streaming services you don’t use. Join for long enough to watch that program you’ve been dying to see, then discontinue them.
Don’t sign up for free trials that morph into automatic billing once you’ve forgotten about them. Or keep a list and cancel them before they start costing you.
Buy only what you need in terms of computer storage, memory, and broadband capacity.

Shore up your credit

Maintaining good credit is more important than ever in times of crisis, so take a few moments to access your credit report. You can check your report for free once a year.

Check your credit score and know what it means: 800 or above is exceptional, and 300 to 579 is very poor, but you’ll likely fall somewhere in the 600-750 range. A score of 670 or higher is considered good.

If you find you’re at the low end of the scale, take steps to make repairs, then start to build your credit. Find out what you’re doing right and what you need to do better. Your payment history, how close you are to your limit, how much you owe, delinquencies, and your credit mix all factor into your rating. Help is available from budgeting apps, guides, and government resources.

Plan for the future

You never know what the long-term consequences of financial turmoil will be. Take a conservative approach by controlling what you can.

If your employer offers retirement plans, explore those options and choose one that will help you save the most. Companies that offer contributions to their employees’ 401(k) plans may as well be giving you a delayed bonus. Take advantage of it.

But don’t stop there. While you’re taking care of business, plan further into the future. Protect your family by setting up an estate plan to distribute your assets and specify your future medical care preferences.

This will include designating powers of attorney in case you’re incapacitated. Be sure you have a will, and that all your essential legal documents are accessible. An estate planning checklist can ensure you’ve got everything in place.

By keeping these factors in mind, you can assemble what you need to remain stable financially in an unstable economy. Just because you don’t know what’s ahead doesn’t mean you can’t shore up your position and plan for what might come next. You can do it.

About the author:

Jessica Larson manages SolopreneurJournal.com. She's formed several businesses over the years and currently develops online courses for students.