How to protect yourself and your money during a crisis?
Warren Buffett once said: “It’s only when the tide goes out that you learn who has been swimming naked.” This is a point to keep in mind in order to allocate your money really reliably and effectively. Here are a couple of tips to help keep yourself safe during an upcoming crisis.
The power of cash
Many people get used to credit cards from various banks, as well as the payment systems installed in their phones. It seems that these innovations are so ingrained in the minds of users that it is difficult to imagine that they will abandon technology. However, for those who have had a situation when the card didn’t work in a restaurant or store, it will become easier to understand what will be discussed below. During the coronavirus pandemic, when people are on self-isolation, bank failures can be a common situation. So it is better to have either several cards of different banks, or a certain amount of cash, so as not to get into trouble.
The issue of daily settlements gradually leads to the fact that you should also keep the necessary amount of cash at home, which will help you to live in security if several banks are having problems at the same time. The best option is to keep an amount equal to your monthly salary. For those who have children or elderly relatives, it is better to increase this amount in order to have reserves for necessary medicines in case of illness. In addition, you should not store large sums of money so that you can easily pay for the delivery of products during quarantine.
After securing funding for the necessary needs, you can proceed to the next stage — the research of costs. When calculating risks, it is better to consider the worst-case scenarios: layoffs at work, business collapse, and so on. In these conditions, it is necessary to minimize any expenses. Even if everything turns out successfully, it’s better to be too wary.
At this stage, you should check the availability of assets, what the money is invested in and whether everything is fine there. It is worth worrying for those who have invested a large sum in any of the companies whose shares have begun to plummet. In this case, you need to contact the investment company to revise the terms of the deal or exit it before it’s too late.
Big money for little time
During the crisis, a large number of fraudsters appear on the market, promising large earnings with small investments. People often tend to panic and give their money to scammers. You shouldn’t do this, no matter how reliable everything seems to be. The field of miracles occurs only in the tale of Buratino.
What should be the financial cushion?
Usually it has to make provision for the family within 6-12 months. The volatility of the ruble again raises the question of what currency should be kept in order not to lose all money at once. Some should, of course, be kept in local currency in case of need, and the rest in dollars or euros.