5 Tasks To Tick Off Your Mid-year Checklist To Keep Your Finances On Track
Wow, time moves so swiftly, doesn't it? It feels like just a short time ago that 2023 had commenced, and now we find ourselves at the midpoint.
Currently, as stock markets ascend in numerous nations, certain countries are plummeting into economic downturn. Additionally, widespread job cuts, numerous bank collapses, and surging interest rates are among the worrisome factors affecting the entire globe.
In the midst of these fluctuations in the economy and considering the realization brought by the COVID-19 pandemic regarding life's unpredictability, wouldn't it be more prudent to ensure the stability of our financial situation rather than idly fretting?
Therefore, why not seize this chance halfway through the year to reflect on our financial situation and mark off these items on the mid-year checklist to guarantee that our finances stay on course for the remainder of the year?
5 Mid-Year Financial Tasks To Complete
Emergency Fund: A Necessity, Not An Option
A sudden and unexpected financial crisis is the very thing that frequently helps us see the significance of possessing a reserve fund or a fund for unexpected circumstances.
A well-funded emergency savings account is an essential aspect of maintaining good financial well-being, especially during times of uncertainty and economic downturns. This is precisely why it is vital to prioritize the establishment of a sufficient cushion for unexpected expenses, if you haven't already done so.
This investment serves as a safety net during unexpected monetary crises that may arise from an abrupt unemployment, major health issues, incapacity, or substantial reduction in income. In any of these unfavorable financial circumstances that may temporarily disrupt your cash flow, an emergency fund can come to your aid by assisting you in covering your regular monthly expenditures.
It is generally recommended to establish a contingency fund comprising of an amount equivalent to a minimum of half a year's worth of your regular monthly expenditures. The crucial monthly expenditures to consider for this fund include your rental payments, utility bills, loan equated monthly installments, insurance premiums, your children's educational fees, monthly contributions towards investments such as systematic investment plans, and so on.
Ensure Sufficient Insurance Coverage
Another item to cross off your financial to-do list as soon as you can is to ensure you have sufficient insurance coverage.
If you have yet to acquire life and health insurance, even in light of the COVID pandemic and widespread job losses serving as major wake-up calls, we are curious about what is preventing you from grasping the significance of these two.
First and foremost, the main goal of acquiring a life insurance plan is to offer a substitute income for your loved ones in case of your unexpected passing. Ensure that your life insurance policy covers an amount equal to or greater than 15 times your typical yearly earnings. You might consider opting for term life insurance instead of other types of life insurance options since it offers extensive coverage at significantly affordable premiums.
Furthermore, besides term insurance, it is essential to also possess health insurance. Follow this link to comprehend the advantages of acquiring health insurance.
It is important to consider that having a health insurance plan that offers sufficient coverage helps to decrease the potential harm caused by escalating healthcare expenses. It is also necessary to bear in mind that even if your employer provides insurance through group health policies, such coverage often falls short in meeting the costs associated with hospitalization. Additionally, these policies typically expire once you change jobs, leaving you without health coverage until you are enrolled in another health plan provided by a new employer.
Get Started With Investing Now
A lot of us dismiss the notion of investing, especially when we are just starting out in our careers, and insist on delaying it until the 'perfect moment'. Have you ever wondered why that perfect moment never arrives? The truth is, there is no better moment to start investing than the present. So don't hesitate any longer and embark on your investment journey today. Remember, time is valuable and waiting won't bring you any closer to financial growth.
Furthermore, if you remain hesitant about the concept of investing immediately, keep in mind that the earlier you start investing, the greater opportunity your money has for generating wealth through the advantageous impact of compounding interest.
On the contrary, if you continue to delay and wait for the "perfect moment," the likelihood of not achieving the desired amount of money within the desired timeframe increases.
Get Credit-ready For Better Loan And Card Deals
It's obvious that having a solid credit score is valuable in today's financial landscape. This numerical depiction of your credit history, spanning from 300 to 900, plays a crucial role when lenders evaluate your eligibility for loans and credit cards. Essentially, your credit score reflects your reliability in repaying credit card expenses and loans based on your past behavior.
Learn more about the methods used by credit bureaus to calculate your credit score by clicking here.
Your credit score plays a vital role in the eyes of banks and other financial organizations in determining whether you are capable of repaying your debts based on your past payment history. Additionally, it reflects the probability of you failing to make future loan or credit card payments. Having a commendable credit score showcases your reliability, while a poor or nonexistent credit score causes lenders to exercise caution when deciding whether to approve or decline your application. Hence, it is crucial to maintain a good credit score to ensure that you can obtain a loan or credit card whenever the situation calls for it.
Therefore, if you haven't reached a point where you can obtain credit, view this halfway point of the year as a chance to achieve it by building a favorable credit rating.
Curious about ways to achieve a solid credit score? Here are the key aspects that influence your credit score. Additionally, ensure you avoid engaging in these detrimental practices that could have a negative impact on your credit score.
Earn Extra Cash With Side Gigs
No matter what profession you're in, whether it's being a business owner, engineer, medical professional, journalist, or any other field, chances are you have a secret talent, artistic side, or hobby that you truly love, am I correct?
Considering the widespread job cuts and unpredictable economic situation, why not make money from your passion by turning it into a side hustle? If you haven't done so already, make sure to include this in your mid-year checklist. It can serve as a financial safety net and provide you with extra income during uncertain times like a recession. To explore different options for side hustles in more detail, click here.
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