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The previous year has left many people in bad financial health, and a large number of people have had to bear large salary cuts because of the global conditions. Hopefully, there are better solutions around the corner with vaccination trials underway, and soon all this will seem like a bad dream.

Your finances have already probably taken a hit, and you now need a proper strategy to recover all the losses you have borne through the previous year. While there is never a one size fits all approach to get your finances on track, some of the strategies mentioned below can help you create value.

1. Become Self Aware

While your bank balance and savings account is something you might want to ignore for the next couple of years, it is even more important to keep a stock of your earnings and be aware of how long you can manage without having a good source of income or any source of income at all.

You can start by figuring out how much you hold in both taxable and retirement accounts combined. An evaluation of your stock standing will also help you identify stocks that are minimizing your gains. The stock market has recently performed horribly, with stock prices taking a direct plunge downwards due to investors’ fear of a recession. However, many stocks have also ended up getting a large amount of capital gain, and some have even given out dividends in these testing times. It’s all about where you invest and can turn the situation around in your favor if you do adequate research beforehand.

2. Create A Financial Planner And Consider An All-Cash Diet

The next logical step after self-awareness is to put your acquired information to good use and create a financial planner that considers your needs and the market forces in play to salvage whatever you can from the situation. A financial planner can also help keep your expectations in check and help you create a sustainable plan to support yourself and your more important goals.

In the world of integrated transactions and credit purchases, it might not be a bad idea to fall back to conventions and to make use of the cash-only diet. The pay later concept has caused many Americans to fall into a vicious cycle of credit card debt where they cannot pay the installments for the things they purchase on time and incur extra fees. An all-cash diet restricts you in the sense that you only spend what you have at the moment and don’t end up spending your future income.

3. Make A Financial Vision Board

Do you have a dream house or a dream vacation that you want to go to? Do you dream of pursuing a Ph.D. in an intriguing subject? All these dreams come at a cost, and there is no right or wrong time to dream for your future. A financial vision board is a relatively new concept where you create your plans according to the goals you want to achieve in the future.

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Once you have your goals in sight and know that these are not just dreams but also possibilities that you can achieve if you just push yourself towards the right direction, you will be a lot more motivated to achieve these milestones.

4. Negotiate With Your Salary And Debts

Running a successful negotiation is tricky and something many of us try to avoid actively, but it is essential to drive your negotiations up to have enough to cover your needs. You can negotiate with your salary and deal with your debts, especially with your credit card debts. Many companies will help you if you let them know that you are trying to reduce the debt on your shoulders, and their individuals are more well equipped in this situation as they regularly deal with clients with multiple issues and a desire to become debt-free.

Salary negotiations can be quite tricky, but you can run a few mock trials with your friends/family to determine the best way to approach your employer for a raise or added benefits. Your friends and family can point out instances and even give you recommendations for your strategy, depending on the type of employer you have.

5. Consider Making Stock Investments

As you might already be aware, the stock market is a place of high potential and growth. Many multi-billionaires had emerged from the rags after a recession simply because they made stock investments when the market was at an absolute low. The 2008 housing crisis saw a restructuring of the stock market where many new traders emerged because they parked their money in the right stocks and waited for a long time.

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If you want a good long-term plan that also generates a large amount of passive income, then this might be one of your best bets. Stock returns normalize over long-term periods that are longer than 5 years and if youre someone who wants to play it safe, you can also invest in the S&P 500 stocks or in stocks that are known to carry a lot less risk.

6. Explore Side Business Avenues

While the conventional dream for many people is to work at a leading FMCG or a top multinational job, these jobs only give you a certain amount of spendable income, and promotions are contingent on multiple external factors.

Many Gen Z and Gen Y individuals are shifting towards side hustles and having a secondary income source. This pandemic has made many people realize that only having a sole source of income is an incredibly risky thing to do, and multiple streams of income are becoming more and more of a necessity given the increasingly cutthroat culture of the corporate world.

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Side businesses allow you not only to earn some extra cash in your free hours, but some side businesses are also able to get you a steady stream of passive income over the next years. Some of the very successful passive income streams are affiliate marketing and blogging, where your posts can earn you revenues of thousands of dollars annually. All of this only requires you to make scheduled blog posts periodically and stay in line with the latest SEO strategies and algorithms.

Side businesses allow you to be your boss, work by your own rules and work on your passionate things. If you’re passionate about cooking, then you can start a homemade food business and pocket a large amount of profit yourself. Your side business is yours, which means you can choose to decide how many hours you would like to work in the profession.

7. Tech Is The New Tomorrow

While technological innovation isn’t progressing as rapidly as IT professionals would like to see, the industry is still one of the most booming and prosperous industries there are. With the advent of AI, development of Web 2.0, there are just so many future possibilities, and your investment and interest in tech can end up paying you a lot more than you can imagine.

Globally there is a shortage of programming related professions, and people serious about going into careers with lucrative salaries and incentives should think about parking their investments in the tech world. Most information is free and accessible online, and you can even take multiple programming courses and learn a couple of programming languages, which can give you an advantage in the job market.

8. Max Out Your Retirement Savings Plans

The future is pretty uncertain and bleak, and there is no saying when this virus will leave for good. There is also no knowing when a new pandemic or similar global catastrophe hits us, and it is becoming more and more important to save whatever you have for the bad times ahead. Even if things go well from here, the market will take a long time to adjust and come back to its full form. It took the stock market an approximate amount of 5 years to fully recover from the devastating blow of the financial crisis.

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Start contributing more to your 4o1 plan or any other plan you follow or is provided by your employer. It will help you make a larger amount of tax savings and help you make sure that you don’t have to face many financial issues once you retire.

With all this going on, there is an urgent need to stay calm and do whatever you can manage. This year has been unpredictable and has stretched out longer than anyone of us would have wanted it to do, but like everything, it also comes with an expiry date. So while the times may be bad today but they certainly wouldn’t remain the same tomorrow.


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