After more than a decade from the 2008 global financial crisis, policymakers were constantly reminding and assuring us that the system is much safer. But the questions remain – were, and are we truly that safe? What about nowadays circumstances?
With the situation of things, a viable response to an eventual financial crash seems to be a thousand miles away. Coronavirus Disease (COVID-19) pandemic continues to rapidly disrupt the performance of all sectors, and work stoppages are some of its effects.
In places where COVID-19 infection rates have shown a decline, the states have begun the process of returning to work. However, the risk of becoming infected with COVID-19 still remains a real threat. A lot of employers are facing situations when some of their employees are refusing to perform certain assignments or return to work, citing the health risk.
So, what is a work stoppage, and how can it affect you?
The Work Stoppage is a Kind of Financial Crisis
A work stoppage can be defined as a temporary cessation of work as a form of protest. It can be initiated by employees or management of the company. When initiated by employees, a work stoppage refers to either a single employee or group of employees who cease work deliberately as a means of protest. The most common types of work stoppages are strike actions organized by unions, which is nothing else than a mass refusal to work. If the work stoppage is organized by the employer, it generally takes the form of lockouts. A lockout may be defined as a temporary denial of employment during a labor dispute with the purpose of making it financially unbearable for employees to protest. Note that some unions have “strike funds” into which their members pay their dues. It leads to an increase in the number of people applying for quick 1 hour loans in order to afford to cover their daily necessary expenses and pay bills.
The Necessity of Financial Planning
Financial planning can be defined as a process of determining the financial goals and major priorities of your business or personal life. While planning, you should consider your resources, risk profile, and current lifestyle to compile a more balanced and realistic plan to achieve your purpose. But for some reason such as strikes or lockouts – which births labor strikes, the chances of effectively planning towards our financial objectives might become somewhat unstable. Stress in the workplace can cost you big money. How important successful money management during your work stoppage is? Generally, financial planning helps determine the short and long-term goals and create an effective strategy to meet the objectives. You are expected to be able to manage your money effectively. You can easily achieve your goals, getting where you want to be with the help of an expert financial advisor or with some budgeting or savings tools. However, budgeting is not just about saving money. You also must take control of your spending. The following are the main reasons you should consider financial planning:1. Income
You can manage your income better when you adopt financial planning. With that, you can understand how much you would need to pay your taxes, savings, and other monthly expenditures.2. Cash Flow
You may increase your cash flows progressively when you carefully monitor your pattern of expenses. When you plan tax diligently, spend prudently and budget carefully, you will be able to keep more of your income. You could save some money.3. Capital
Ideally, an increase in cash flow will automatically lead to the capital increase. This will let you consider money investments that are viable enough to enhance your financial well-being.4. Security
Family financial security is crucial. With the proper insurance coverage and policies, you and your loved ones can enjoy some relative peace of mind.5. Investment
With a proper financial strategy, you are putting your personal circumstances into consideration. Not only that, but you are regarding the risk tolerance and objectives too. Trying to list them will guide you in choosing the right investments that suit your needs, goals, and personality. You should embrace budgetary planning. When having a surplus, you can decide how to spend, save, or invest your money. It is a sure path to an improved standard of living, savings, and understanding finance.
Tips to Financially Manage a Work Stoppage
Strikes and lockouts are different types of work stoppages. Often, the concepts are misunderstood. Generally, though, work ceases, and employment is denied during the period. There are commonly low wages, poor communication within the employer organization, employee debt, and pay disparity. Do you get paid if you go on strike? No, most likely, you will not be paid by your employer. Can you work while on strike? In order to avoid union discipline, you must make sure you are not a union member anymore if you choose to work during a strike. The finance-bound question you might want to ask at this stage is how you prevent overspending and particularly, what are the implications? Many workers are failing to prepare.- * Understand the factors that trigger you to spend money. It includes time of the day, environment, mood, peer pressure, and lifestyle.
- * Track your spending judiciously. First of all, take inventory of all fixed expenses-bills that must be paid despite everything. Bonus tip – try to implement one “no spending day” each week.
- * Stop relying on your credit card. Consider increasing the credit limits on your credit card and a 0% interest credit card. These credit cards may provide an injection of liquidity during the crisis.
- * Concentrate on short-term goals. When your paychecks stop coming, you should focus on your immediate financial needs, including covering the most important debts (mortgage, car), necessary medical bills, and also leaving room for food and utilities.
- * Master the art of budgeting. In these situations, every penny counts. No one knows when the next emergency will strike. Consider creating an emergency fund – set aside between three to six months’ worth of expenditures, or even better – a year’s worth of expenditures.
- * Access unemployment benefits. Many states allow workers to apply for unemployment benefits during crises like a labor strike. However, if they will receive back pay once the stoppage is over, they might have to pay the benefits back.
- * Ask for help. Don’t hesitate to lean on family members, friends, community services, and someone else that could help in an emergency, especially if it’s related to some health care costs. This might save you from spiraling deep into debt.
- * Take a loan. If credit unions are not an option, consider applying for a same day payday loan to address your urgent money issues. Check to see what options are available and best match your needs.
- * Minimize withholdings. In case there are other working members of the household, consider temporarily reducing their tax and retirement withholding amounts on following paychecks.
Paying yourself last;
Carrying high-interest debt;
Ignoring the importance of a budget;
Overpaying for property insurance;
Impulse buying;
A big tax refund;
Failure to optimize your 401(K) retirement plan;
Inadequate preparation for non-monthly expenses.
Conclusion
Coronavirus hit Americans especially hard, and it is perfectly normal to be concerned about the pandemic in your workplace. Financial planning takes a lot of effort and attention. You must be ready to put in the necessary work and input to reap the fruits. Take time to understand your money priorities well enough; be sure of where you spend and what you spend your money on. Also importantly, it is recommended that you have a plan which you must stick to. Also, because change is the only constant thing, you should expect emergencies. If you are not very good at saving, you should consider getting into the habit of saving money as soon as possible. Constantly improve your money management skills. Stick to whatever works for you, get your finances in order, create an emergency fund and a simple spending plan. Ultimately, make sure to use your time away from the job productively. 
