Have you ever wondered what would happen if you were suddenly unable to work for any reason? Sadly, thousands of families experienced exactly this with the onset of the covid pandemic. It is thought that around 25% of people were laid off or knew someone who was laid off during the covid pandemic, disproportionately affecting low-paid workers. While the retail and hospitality sectors saw massive growth, the number of people needing to find work grew dramatically. Around a third of people lost employment during the first 6 months of the outbreak, and restrictive measures are yet to find alternative employment.
For too many people, the thought of losing one or all of their income streams is enough to keep them awake at night. After all, everyone has commitments and financial obligations. And with the world seeking a return to normality, it will take some time before the economy recovers from the impact of covid. It processes what the future looks like and how it can avoid history repeating itself.
While many benefitted from unemployment and stimulus checks, there is still a vast portion of citizens who fell through the cracks. But is there anything you can actually do to avoid the drastic implications that losing their income can have?
With many millennials and Gen X households reporting that they would be under financial stress if they lost their job, choosing to take out income protection can help soften the blow should the worst happen. You can never truly see what will happen in the future, be it an accident at work or home, closure of business, or any other reason, choosing income protection can eliminate the issues that finding yourself with no income can present and give you some breathing space until the situation is rectified.
When taking out any insurance policy, make sure to check for any exclusions and clauses that can invalidate your claim should we need to. Make sure you are happy with the level of payout and the duration of cover should you need to make a claim – for example, some policies can include an optional extra to start after one week; others require a longer period of June, employment or sickness before they payout. Be clear on what is and isn’t included and ensure you choose the right cover for your circumstances.
How many stories have you heard where people lose everything due to a freak accident or a case of being in the wrong place at the wrong time. It can be morbid to think like this, but if you have concerns about how you will manage financially in the event of an accident, then choosing an accident cover can provide you with a payout should you be in any type of accident.
Choose the level of cover you will need based on your circumstances. You can get cover for a variety of accidental injuries in many different circumstances. For example, if you are in a car accident and you need to engage the services of a truck accident lawyer, you can claim against your accident policy to pay out to help you cover expenses and loss of income while you are waiting for your claim to be finalised should you not be at fault.
Some covers can protect your family in the event of death and cover funeral costs.
50% of Americans have no money set aside for savings or a rainy day. In the current climate, it is expected that many of the 50% with savings will have seen this depletion over the past year. When you live paycheck to paycheck, it can be tough to consider putting money into savings. If you can’t afford to pay your bills, you most definitely can’t afford savings.
Even if you are currently financially struggling, it is worth considering options that help you save money, even if it is a nominal amount each month. Building good financial habits can be done at any age in life. It might be that you need to sit down and address your financial situation to see exactly where all of your money is going before considering savings.
Another viewpoint is that if you are paying off high debt levels, any money you would be saving would be better spent paying off your bills to reduce your outgoings. But again, if there is nothing left, this idea doesn’t help much.
Some people find success with the simple act of putting money into a savings account or a separate account that allows frequent withdrawals. Pay all of your bills, and anything left over goes into your savings/spare account. Use the account when you need to and try to leave something in the account, even if it is a nominal amount. Then the next month, do the same. Chances are you won’t notice small amounts, and the act of having to transfer money to and fro will put you off small frivolous spending. Every month, that small amount will grow steadily until you realise you aren’t using all of your income and have built a savings pot easily.