A Guide to Money Management during A Global Pandemic
The current pandemic has brought uncertainty in markets and economies worldwide. Businesses have halted due to lockdown restrictions and financial challenges. Workers are suffering from reduced hours, pay cuts, and furloughs.
As the outbreak continues to impact the economy, it can be a challenge to maintain financial stability now and in the future. Here are ways to manage your money in these trying times.
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Revisit your budget
Assess all your sources of income and sort your expenses based on needs and wants. Create a realistic list of monthly bills, emphasizing the must-haves. Your new budget should focus on goods and services you routinely need to pay for like groceries, mortgage, gas, and electricity bill.
As much as possible, spend more on necessary goods and less on luxury items during the pandemic. Avoid splurging on unessential expenses like clothing, entertainment, gourmet meals, and beauty services at least until the outbreak subsides.
Build an emergency fund
Any financial advisor would recommend setting aside an emergency fund. This will help cover unforeseen expenses like a medical issue or an urgent car repair. Your emergency stash should amount to three to six months’ worth of living expenses. This way, you can be ready for any challenges the future may bring.
You can start building your savings by setting aside the unspent money from your luxury list. Avoid investing or lending money to others until you have your savings sorted out. Remember, an emergency fund can save you from complete financial disaster.
Pay your credit on time
Unfortunately, just because most shops and businesses are closed does not mean your credit stops. Delayed credit card payments mean higher interest rates and bad credit scores. Fulfill at least the minimum payment to avoid hefty bills later. Analyze your last few card statements and list down payments that you can avoid now.
If you’re unable to meet all of your financial obligations, contact your creditors as soon as you can. Some programs are already implemented for mortgages, personal loans, and automobile payments. Don’t be shy to ask if you’re entitled to reduced fees and deferred payments.
Stock up smartly
With lockdowns in place, stocking up on essentials is critical. But there’s a fine line between stocking and hoarding. While the pandemic can cause panic and stress, overspending on food and groceries is a bad idea. Just purchase enough food staples, toiletries, cleaning supplies, and prescribed medicine to last you a month.
Don’t stress too much about the availability of goods since most governments are ensuring the steady flow of essential items. If you’re worried about frequent human contact and hefty transportation costs, take advantage of nonperishable bundle offers. Be smart about your purchases, too. Add long-lasting perishables, canned vegetables, and frozen fruits to your grocery list. Boxed, canned, and shelf-stable items will not only last longer but also minimize any waste.
This unprecedented situation calls for drastic financial measures and sacrifices. Following these few simple tips can help keep your funds in check and your debts fulfilled. When the situation ceases, you will find yourself in a stronger financial position without additional liabilities.
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Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
(email) ken@stltest.net
(website and blog) https://www.accountingaccidentally.com/