[VIDEO] What COVID-19 Has Taught Us About Our Finances
As we now know, a pandemic poses a number of challenges that can not only harm our health and our communities, but also our finances. As we’ve witnessed, the rapidly-moving COVID-19 has brought daily lives of tens of millions of people to a grinding halt; thus, shaking the foundations of social classes from all income levels. This has come to show that anything can change in an instant. While it’s difficult to plan for everything, having a contingency plan can certainly help mitigate the financial impact. If money is feeling a little tight right now, consider these lessons:
#1 – Establish a budget and start making cuts.
Now is the great time to reassess your spending and create a budget. Start off by calculating your expenses and income. If there’s a budget deficit, you may want to eliminate any nonessential costs. This can include gym memberships and subscriptions services. By limiting yourself to solely necessary spending, you’ll be able to save a considerable amount of money which could go towards your mortgage, groceries, and savings. These cutbacks may not feel like much, but they can really add up.
#2 – Beef up your emergency fund.
An industry report reveals about only 40% of Americans could pay an unexpected $1,000 expense without having to charge it to a credit card.1 One of the best things you can do for you and your family is to have a emergency fund to cover unexpected expenses. I always say a good rule of thumb is to build up an amount of 3 to 6 months of your monthly living expenses.
And #3 – Seek out opportunities.
Losing your primary source of income, or just retiring, can certainly have an impact on your savings, but there are many ways you can earn extra cash. Consider starting a side business whether it’s online tutoring, driving a vehicle for hire, or working as a greeter at a retail department store, when times are tough, don’t be afraid to start something new to help bring in the money.
These uncertain times can make it hard to keep a clear head. However, it serves as reminder to remain calm and know that we can recover from this. By being prepared and strategic in how you’re managing your finances, you’ll be able to overcome any obstacle life throws in front of you.