A pandemic poses a number of challenges that not only harms our health and our communities, but also our economies. As we’ve witnessed, the rapid-moving pathogen 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 comes to show that anything can change in an instant. While it’s difficult to plan for everything, having a contingency plan can help mitigate the financial impact. If money is feeling a little tight right now, consider these lessons:
• Establish a budget and start making cuts. Now is the best 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 that could go towards mortgage, groceries, and savings. These cutbacks may not feel like much, but they can add up to a lot.
• Strengthen your emergency fund. An industry report reveals about only 40% of Americans could pay an unexpected $1,000 expense.1 One of the best things you can do for you and your family is to have a fallback fund to cover unexpected expenses. A rule of thumb is to amass an amount equivalent to three to six months of living expenses.
• Seek out opportunities. Losing your primary source of income can be detrimental, but there are many ways you can earn extra cash. Considering starting a side business from home whether it’s online tutoring, web development, or freelance writing. And while market swings can be frightening, they can also be healthy events. Times like this can be a great time to reevaluate your risk tolerance. We’d be more than happy to connect and reassess your portfolio for new opportunities.
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.