Now that the pandemic is hopefully slowing down, there are things that we need to focus on, such as the lessons that we learned about how we handle our money. What did the pandemic tell you about finances? What did you learn about yourself? The pandemic is more than a health risk. It is also an economic risk. If you don’t put these lessons into good use, you will not be ready for another pandemic, which experts said will be sometime in the future. Possibly, it will happen in the same lifetime.
If there is one clear takeaway from the pandemic, it’s that people should have an emergency fund. They should open separate savings account for emergencies such as a pandemic. That fund should cover at least six to eight months of their monthly expenses. If you are spending $1,500 a month, you should have $9,000 for emergency for six months or $12,000 for eight months.
An emergency fund, of course, does not solve all your financial problems during a pandemic. What it does is soften the blow. That’s all you need when you’re out of work suddenly. You need time to get your bearings and find another job.
Reduce Your Debt
There are necessary debts such as home mortgages and car loans. Then, there are debts that you shouldn’t have in the first place, such as credit cards. Why is your credit card debt almost $20,000? What have you been buying? If you only don’t have so much debt, you could’ve saved a lot more despite the pandemic. Instead of paying off your credit cards the past year, you could’ve invested that money or reduced the principal amount of your home mortgage.
So, ditch those expensive fitness classes since you won’t be attending those for a while. Forget about that expensive handbag that you cannot truly afford. Reducing your debt means living below your means. You do not spend money that you do not have in your pocket.
Review Your Financial Plans
Where are you going with your money? How are you going to grow that in the future? The pandemic showed that people could not rely on their salaries alone. They need other sources of money. If you’ve survived the pandemic with your savings intact, then think about another source of income. If you depend on one income stream, it will take you years before you can save enough in an emergency fund. Consider where you’re going to get more money to cover your expenses and save for the future.
Diversify Your Investments
The stock market is a steady investment, but it is not without its risk. Stocks can plummet in a day, and you’re left with no choice but to sell the stocks or hold on to them until the value increases again. The pandemic should have taught you that you need money you can pull out at the last minute and investments you can hold on to for a long while. Think about investing in real estate since it fared well in the past year.
But investments are also quite personal, so you have to study the risks that you take. Can you afford to wait for an investment to mature? Do you have the time? Does a short-term or long-term investment sound more viable to you? Safeguard your wealth and find investments that work for you. The bigger tragedy is not investing at all.
Take Care of Your Health
It sounds clichÃ©, but health really is wealth. Take care of yourself more. Follow protocols. You will not find yourself needing to spend your emergency fund on medical needs if you stay away from doctors and hospitals. Do exercises and fitness regimen at home. There’s nothing like your living room as a home gym. Focus on getting yourself fit and healthy because that’s your best defense against the coronavirus.
You will save more by preparing healthy meals on your own and by doing bodyweight training instead of paying for expensive gym memberships. Everyone’s focus should be on how to stay healthy. This isn’t a trend. It’s a necessity that will save your life in the future.
The pandemic truly has upended everything. From health to mental wellness to finances and businesses, it did not leave anything untouched. But if there is one lesson to take from the pandemic, it’s to be ready for something like it again. Because scientists have been warning of another one in the future, and while everyone hopes they won’t experience another one in their lifetimes, more and more of these catastrophes grow closer to reality.
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