With the coronavirus pandemic forcing people to render less working hours or worse, being laid off, it’s important to assess what your financial options are during these uncertain times.
If you’re worried about making ends meet, you’re not alone. This pandemic had me tossing and turning not only in fear of catching the virus but of being stripped of my hard-earned savings. I’ve found myself tightening my belt leaving provisions intended only for the essentials – food, household supplies and utility bills. Paycheck or none, we need to change the way we manage our finances to put us in a better position to ride out any emergencies in the future.
These three habits may help you avoid being on panic mode when faced with a crisis and which can also turn a potential financial downturn into a setback.
Build an Emergency Fund
If you don’t have an emergency fund yet, now is a good time to start building one. An emergency fund is like a savings buffer which you can set aside for when something untoward happens like losing your job.
As what the pandemic has shown us all, life can change dramatically overnight and having a strong safety net can help those who are impacted weather the crisis better.
How big should one’s emergency fund be? The goal is to be able to set aside at least 3 months of living expenses in your savings account. First, determine how much you can realistically save – the more you’re able to cut down expenses, the more you can stretch your savings.
Spend less on non-essentials
How much were you able to save since the enhanced community quarantine when we’re all hunkered down at home?
Save for grocery items, food, medical supplies, utility bills and in-house recreational materials, we have not been splurging on anything else. The covid-19 situation has changed our lives – the way we spend is no exception. It’s time to reset priorities and rethink spending habits in these trying financial times.
To get you started, identify the essentials from the non-essential ones. If it’s not an essential expense, consider removing it from the list. Create a budget plan. For any budget plan to work, you need to stick with it. Track down where your money goes. Write it down or make use of a budget app – whatever will work for you.
Pre-coronavirus, some of us were used to outsourcing chores from doing the laundry to pet care. Imagine how much we can save if we take on these task ourselves.
How many times have you heard the financial advice that the best time to invest is now? That’s well and good but not if you don’t have a disposable income to spare.
Investing in ourselves is good, too. We’ve picked up so many practical skills while we’re at home like cooking, baking, planting etc. If you’ve lost your income source, you can divert your energy into searching for online work or starting a home-based business using your newfound skills.
It’s never too late to make your finances emergency-proof. Uncertainties are here to stay – never more so than today but if there’s anything that you can do to stave off disaster by having a financial strategy, the best time to have a go at it is now.