To avoid debt and to be able to properly manage finances

5 financial axes that should be followed during "Corona"

Financial planning is an ongoing process that helps individuals make the right decisions.

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Companies specializing in financial consulting, including Nerdwalt and The Balance, have identified five axes that should be followed and taken into consideration during the Coronavirus pandemic, in the context of debt avoidance and the ability to properly manage financial affairs, noting the importance of financial planning and budgeting. As the main key to the success of the set plans, as well as allocating some funds for emergency cases, in addition to insurance coverage, review of debts and payment.

The companies explained that the five axes are as follows:

financial planning

Financial planning is a continuous process that helps individuals manage their financial affairs, make the right decisions, and provide the necessary savings to achieve the set goals, by developing a deliberate plan that starts from assessing the financial situation, starting with determining regular income and other resources as well as fixed and variable expenses, and other obligations Financial, which gives individuals a clearer picture of their spending pattern, the possibility of planning based on available information and data, and setting short, medium and long-term goals. Financial plans should be designed according to individual needs.

budget

The budget is the main key to the success of the financial plan set, so that the individual can manage his money in an effective way, it allows the individual to track spending and its categories as well as measure the progress that has been made towards the set goals.

It also enables a person to reduce unnecessary expenditures and increase savings or income rates.

The budget must be flexible towards the obstacles that may face the individual, and it must always keep pace with developments in the level of income, whether in the event of an increase or decrease, and for this reason the financial plans should be reviewed on an ongoing basis based on the available data.

Emergency funds

It is important to develop a new spending plan with the allocation of discretionary expenditures, especially in light of the current circumstances, as this may lead to an increase in savings, which may help establish an emergency fund, one of the things that the epidemic has highlighted its importance and necessity is the presence of an emergency fund, to ensure that people are not harmed. According to the studies, expenses should be kept ranging between three and six months, and it is wise to extend to cover a period of 12 months, and a savings account can be opened to which specific amounts are directed every month. In many cases, individuals find themselves making remarkable progress through reduced spending in Some categories.

Insurance coverage

Despite the importance of the emergency fund, hedging to cover all risks is no less important, as life and health insurance with coverage of serious diseases is an important and necessary investment for all people, and there may be no benefit from having financial plans, investments and other goals, if not The individual has no means of hedging risks, as insurance against illness, disability, personal accidents, etc., paves the way for the individual to continue his business in general.

Debt repayment

With setting goals, completing the budget and working to provide emergency funds, the individual has a clearer picture of his money and expenditures, and here the review of assets and expenditures will help in setting up a plan to repay debts, and the rule says that when the cost of loans is higher than the return that the individual earns, he loses, and thus Reconsidering debts and payment methods will contribute to correcting the entire financial path, as the costs of credit card debt are very high, and consumer loans may make the financial situation more difficult, and therefore payment plans should be developed to get rid of high-cost debts and exorbitant fees in the first place, and commitment to dues. Periodicity and negotiation with banks in the event of difficulties.

Insurance plans

Companies specializing in financial consulting stressed the importance of insurance plans providing coverage for the individual and his family against any unexpected events that may lead to financial losses and loss of savings as a result of these accidents, noting that insurance reduces financial pressures and sudden expenses, which may arise in the event of Undergo medical treatments.

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Financial Planning and Budget are considered key to the

success of the

President plans.

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