An economic crisis is a reality that can take place at any time. Although there are pointers when this happens as the recession goes in a particular cycle. But sometimes an economic crisis can come as a surprise, like the covid-19 pandemic. The pandemic shut everything down leading to job losses and business closures. This time taught us that an economic crisis can hit anytime and we must always be prepared for it. Here are a few things you can do to safeguard yourself from an economic crisis.

Create an emergency fund

An emergency fund is so crucial for everyone to maintain. This fund is to be used for times of difficulty like an economic crisis. At this time there may be jobs vanishing and having a kitty to manage financial or medical emergencies is needed. The general rule is that this saving must be able to fund at least 6 months of expenditure. Consider your own expenses, family size and any recurring expenditure that you face to determine the size of your fund. This fund can be liquid cash, money in a bank account, fixed deposits or short-term debt instruments – significant liquidity.

Get medical cover

Always have health insurance for your family. It may seem like an unnecessary expense but with medical costs shooting up, having health or medical insurance is beneficial. At least you will have comfort that is nay of you get sick, you will get treatment even if you don’t have money for payment as the insurance will cover it. Don’t skip on the medical insurance premiums no matter what as they can be of help when you need it the most.

Diversify with gold and precious stones

Invest in areas that are different, kind of putting your eggs in different baskets. Invest in gold – real gold or through gold funds. These are very close to liquid and relatively safe to put your money in. Many buy gold in the real form to keep as an investment which may come in handy later. Gold is a metal that is always in high demand and has high value. Precious stones are also bought sometimes for investment’s sake and make inheritances as well. Retailers like hatton garden jewellers will have a large variety of precious metals, stones and jewellery from which you can choose to make an investment.

Invest in less volatile funds

Go in for funds that are less volatile to protect your interests. Hybrid funds limit the volatility of returns. At times of economic uncertainty, people will need liquidity or cash in hand and having such investments are best to keep interests safe. In a volatile situation, many can lose money in the market and having some level of safety is beneficial. For an instance, Lab grown diamonds UK are much more cheaper compared to raw diamonds and there you might like to invest.

Don’t invest in property

One of the most important things to do or rather not do is invest in property. During downtime, real estate doesn’t get better and it is best to keep away. It is an unnecessary expenditure that will weigh down on your liquidity. Although prices may fall, a property may not give any returns during a recession, unless it is your own house.

One of the most amazing facts about managing money is that more people are looking for larger than life experiences but don’t have the means to. It is best to plan properly and live within means to enjoy a stress-free life.