Four Steps to Take Now to Increase Your Own Financial Security
- Author: Jessica Williams
- Posted: 2024-04-05
Financial insecurity is on the rise these days during a pronounced economic slide. However, it is during insecure times that you should take the opportunity to increase your own security. Your own personal financial well-being depends in part on your income, but it also relies on making smart decisions to both boost your future prospects and protect yourself against risks. COVID-19 has caused some assumptions to change that may make you reassess your own financial security. Here are four steps that you can take to boost your own financial security.
Invest in Your Education and Skills
You never know what an employer may find attractive on your resume in the future. Moreover, your current company may be in need of a skill that you have that can put you in line for a promotion or pay increase. Therefore, it is advantageous to build as many skills as possible. Having a broad-based resume will make you desirable to a wider number of people. Increased demand for your services can also mean an increased paycheck.
While getting another degree is helpful here, we also recognize that it is expensive. Taking classes can be helpful because they teach skills and demonstrate a commitment to learning. There are numerous ways to acquire additional skills for free or for a reduced cost so that you do not have to spend a lot to become more well-rounded.
Review Your Insurance Situation
Not having adequate life insurance coverage should simply not be an option for you. People may be depending on you and would be in a serious bind if something happened to you. While you may have life insurance, your coverage may not be enough. Times change and so do your needs, so you may need to increase your amount of coverage. Moreover, you could change the type of life insurance that you have in order to use it to build wealth.
Life insurance is not the only type of insurance that can help with your financial security. Beyond that, you may want to consider things such as long-term insurance that can act to protect your children. Long-term care insurance can allow you to pass your money down to the next generation without having to use it for an expensive nursing home.
Work on an Estate Plan
The number of people who have been sickened and impacted by COVID-19 may have persuaded you that it is time to begin working on an estate plan if you do not already have one. Even if you do have an estate plan, the current dislocations may be enough to persuade you to review your existing plan.
Even if you already have a will in place, your estate plan may still need some work. For example, you may be missing some of the crucial powers of attorney that can help smooth the way for you to receive proper medical care when you cannot make your own wishes known. In addition, you will also want to have advance care directives in place if you become sick and cannot communicate. This has become unfortunately too common of an occurrence during COVID-19.
Moreover, if you have a will, you may need to update or change beneficiaries. You may also want to consider establishing a trust instead of a will to keep an estate out of probate.
Use Credit Wisely
If you are like many Americans, you likely have some household debt. COVID-19 actually presents you with an opportunity to change the way that you use debt to achieve more long-term financial security. The historic drop in interest rates should be a predicate to reconsider how you use debt and what types of loans that you use.
If you are paying high interest rates on your loans, you should at least explore the possibility of refinancing or taking out new loans at lower interest rates. To the extent that you can lock in lower interest rates on the money that you owe, this is an advantageous time to do so. This can help lower your monthly interest expense for the long term. Then, you can take the money that you save and pay off additional debt or build your emergency fund. The current recession has not caused banks to stop lending, so if you have decent credit and a source of income, you will still be able to qualify for a new loan.
