The coronavirus pandemic has changed much about our personal and professional lives. Dubbed by many as “the new normal”, the current situation is one in which uncertainty about the future reigns supreme.
Perhaps the one aspect of life that has been shaken up more than any other during 2020 is personal finance. With so many people either losing their jobs or worrying about potentially being made redundant, changes to the way we manage our personal finances are required.
In this post, we will look to provide you with a few tips to help you to navigate these volatile times.
- Get Your Debt Under Control
At times of crisis, the last thing that you want to do is put yourself at the mercy of ruthless creditors. They may have talked a good game when convincing you to sign up for a credit card or a loan, but be under no illusions – if push comes to shove and they fall on hard times, they will not hesitate in calling in the loan or adjusting interest rates. If you live near to the financial margin every month, it is wise to start paying off your debts sooner rather than later.
- Work Out a Budget
Making a budget can take time and effort. However, at times of economic uncertainty, the value of keeping a tight rein on your incomings and outgoings is vitally important. Start by identifying all of your expenses – you can do this by going over your bank statements or credit card bills with a fine-tooth comb. Leave no stone unturned, and try to broaden the scope to a quarterly or even an annual financial outlook.
- Needs vs Wants
Many of the things that we spend money on are not strictly necessary for us to have a good standard of living. When you have put together a budget, take a ruthless approach to eliminating some of the items on it that you think you could probably do without until the global financial outlook looks rosier again.
- Build an Emergency Fund
The job market is probably the most volatile that it has been for around a hundred years or more. With so many people being laid off across the United States and the rest of the world, you should take precautions to make sure that you are financially insulated for such misfortune. Start to gather a nest egg that will be enough for you to survive for 3-4 months if the worst happens to you.
Fiat currency is at serious risk of depreciation when governments decide to pump money into an ailing system to keep it afloat. To protect your money, the best thing to do is invest it. Whether this is in stocks and shares or property, your hard-earned cash will retain more of its value if it is tied up in commodities or property.
If you are smart with your money, you should be able to navigate the current crisis without making a loss. The tips above are a good place to start, and if you apply them to your financial situation, you should come out on top.