A handy guide to staying afloat even with market turmoil and shaky investments.
The coronavirus has been proven to ravage human bodies. But that doesn’t mean you should let it threaten your financial wellbeing too. Here are six ways you can prevent COVID-19 from ruining your financial health.
Get a refund on your travel spends
When the seriousness of COVID-19 became clear, many found themselves stuck trying to get refunds on cancelled flight tickets and hotel bookings. Between travel insurance claims and haggling for alternative flight dates (that you may have to top up even more money for!), there’s another option you can try. Check the credit card that you booked your flight or hotel with. Some credit cards, such as air miles cards, offer complimentary travel insurance at least to the principal cardholder. So if you booked your trip with such a credit card, you might want to speak to your bank about compensation. Now, because life goes on, COVID-19 or not, future travel plans will still have to be made. Many major hotels chains and booking sites are now offering free cancellation up to 24 hours before check in, which means you can change your plans if you need to, without penalty. Make sure your bookings include this clause. As for plane tickets, it might be worthwhile paying extra for waiver of ticket changes. That way, you won’t have to jeopardise your budget if you need to change your flight plans. And above all else, start buying travel insurance.
Bump up your emergency fund
One of the more scary things about COVID-19 is the economic uncertainty that follows in its wake. To protect yourself and your family against short-term shocks, an emergency fund is your best tool. Go through your expenses for items to cut, which can then go towards your emergency fund. If you have an endowment plan with a cashback option, now is a good time to exercise it.Another way to bump up your emergency fund is to draw out your dividends from your investments. Don’t forget your fixed deposits. Sure, you’ll lose your bonus interest returns, but that’s nothing compared to the penalties and late fees you’ll get slapped with if you’re late with your bills. Your goal is to have 3 to 6 months of expenses saved up and liquid – this means stored in a bank account that you can withdraw from anytime, and preferably separate from your regular bank account.