Protect your financial well-being
COVID-19 has immensely affected our financial health. Tough times have called for tough measures. These said measures had others prepared with some were caught off guard.
The government has employed measures and precautions in regard to the economy. However, you also need to have a plan for yourself being that this Virus is here to stay.
As is, some have been hit with pay cuts, reduction in working hours, furloughs, or termination of employment. Such actions call for restructuring your financial resources in order to maintain your financial health.
Here are some strategies that you can include in your financial action plan for 2021 and next year.
Prioritize your health
Health is key, but even so, proper healthcare is not cheap especially now. Apart from observing the safety precautions to prevent the spread of Coronavirus disease, it is essential to update your medical insurance.
The Ministry of Health has set up measures to alleviate the strain of the pandemic by providing free vaccination to Kenyans in different locations. Take advantage and protect yourself and your family.
The good news in Kenya is insurance firms agreed to extend their coverage to policyholders in the event a person suffers from COVID-19. Firms such as UAP, AAR, Resolution Health, etc. have agreed to insure existing policyholders.
Equally, service providers such as NHIF have extended their deadlines for the selection of outpatient facilities.
This move is to facilitate access to medical and health facilities by low-income earners that cannot afford other insurance premiums that are slightly costly.
Whether you are registered with NHIF or other insurance firms, your priority should be to update your medical cover so that when the need arises, you will be assured of receiving medical care at a facility of your choice.
Under the current circumstances, your ability to meet your financial obligations might be inhibited. Especially with the new tax rates and changes in Kenya’s financial economy, reassessing your debt obligations should be top of your list. Consult with your lender about your current financial status.
The expected outcome should be anything from an extension of the repayment period, waiver on interest, a moratorium, reduction in monthly repayment fee, etc.
For instance, in Kenya, the Central Bank of Kenya put a halt in listing CRB defaulters. However, as the economy reopens, this restriction might be lifted and will affect your ability to get future financial assistance. Inquire with your banking institution/lender on their plans to cushion borrowers and the effect of the new tax rates.
The rule of thumb in times of crisis is not to panic. With everyone experiencing financial anxiety, composure and patience are the difference between making a decision that will dent your finances or making an informed choice.
Particularly in matters of long-term investment, do not rush to liquidate, sell out or pull out. The world is almost out of the woods from this pandemic. Re strategize your plans to fall in line with the new normal.
Equally, you can have a mixed portfolio of both short-term and long-term investments to ensure that you are covered now and in the future. For example, the NSE and forex have since benefited from the crisis as shares plummeted and rose up accordingly. Especially in new tech, innovations and health.
With uncertainty comes the need to have a fallback plan. Before your emergency fund was able to sustain your basic needs for three to six months. In light of Covid, this plan requires one to create an emergency fund that can last up to 2 years.
Emergency funds are meant for situations such as this. So don’t feel guilty spending that saved up cash to meet your daily needs during these uncertain times. Still, ensure that the areas where you are spending these funds are absolutely necessary and fall under needs and not wants.
Yes, now is the time. Tap into government resources to balance your expenditure. Take advantage of the relief foods coming your way, free vaccination drives and medical checkups.
Hello? Maks are basically free now! For just Ksh.10 you can save your life and those around you.
Equally, reorganize and prioritize your budget. Relief measures are not only for your personal finances but also for your business’s financial needs.
You might be feeling shortchanged especially if you have been furloughed, received a pay cut, etc. but you remain in an advantaged position if you can initiate a financial action plan asap.