This pandemic has worsened our pre-existing financial vulnerabilities. With millions of jobs lost or earnings reduced, there is only one question left in mind: How do we bounce back without enough money at hand?
The whole world is living in unusual times. This pandemic has resulted in unprecedented city lock-downs and quarantines, volatile markets and economic recessions. While taking care of our health and exercising health protocols to prevent the spread of the new coronavirus (COVID-19) virus has become paramount, it is also important to prepare and readjust our personal finances so that we are on a solid foundation despite any difficult situation.
Here are some money management tips you might find helpful while you are facing uncertainty during this pandemic:
Time to enhance emergency fund.
The global economy is greatly hit by the COVID-19 pandemic. The recent volatility could lead to long-term repercussions.
Thus, it makes sense to increase your emergency fund. Ideally, your emergency fund should be worth at least six months of your expenses but in trying times like this, it should be increased further in order for you to survive daily struggles.
Your emergency fund is your rescue if any loss of income arises and your fall back when your health insurance cannot cover your hospitalization or check-ups. Most of all, an adequate contingency fund will minimize your dependence on borrowed funds thus putting you in a more secure financial situation amidst any uncertainties.
Time to set your priorities on budgeting and expenses.
When facing an economic crisis brought about by the pandemic, you should learn to limit your non-essential expenses. You need adequate savings at hand if the situation worsens in the near future.
Therefore, you need to review your budget and list down shopping priorities. Needs first before wants in order for you to live decently despite the pandemic.
Time to review your investments.
This pandemic is good timing to take stock of your investments and deal it sensibly and realistically. You may rebalance your portfolio or choose to slightly increase your investments to counter the impact of market volatility.
Risk-averse investors or investors who prefer lower returns with known risks can choose to increase their investments in relatively risk-free instruments. Investing during the pandemic is complicated but needed so if you are in doubt, consult your financial advisor. If you cannot reach your financial advisor, this Investment Calculator might come in handy to help you in decision making.
In a crisis like this, we should avoid panic and instead ensure that we follow the health instructions from the authorities, such as those concerning hygiene and social distancing. We should be calm while making necessary preparations to bolster our personal finances.
Now is also the right time to arm ourselves with a proper financial mindset so if you are still finding it hard to deal with this kind of precarious situation, you might want to check out Pigly, a free online calculator that offers a rich collection of helpful utilities to help people figure out their finances, manage their budget and plan for retirement, almost anything that concerns personal finances and relevant tips to help you get through with this pandemic life. It will never be easy to adapt to the new normal if people are financially broke but with the guidance of Pigly, it is not impossible to start all over again.