The COVID-19 Pandemic has caught the whole world off-guard. It was something that was not expected to happen in this lifetime. Somehow, it became an eye-opener for everyone. It caused us to realize a lot of lessons – whether lessons on life, relationships, work, and even on finances.
In these uncertain and volatile times, more than ever, we need to be financially secured. Now can be a good time to evaluate your overall financial status and make the necessary changes, if needed.
Here are some of the financial lessons that can help at present and in the future as well.
Know the difference between “needs” and “wants”
Now that money is uncertain, you need to prioritize needs over wants. Focus on essentials first than luxuries. Things that are not essential can wait until the pandemic is over. In every temptation to buy something, ask yourself, “Do I really need this or just want this? Can this wait until I am more financially stable?”
Be consistent with budgeting
Are there times wherein you “forget” to set aside savings from your take-home pay? Or do you have moments wherein you do not plan out your budget, thinking that you have a lot to spare? This is the perfect time to stop that bad habit. More than ever, you need to scrutinize and plan well your budget because every penny counts. This will help you be financially prepared for anything moving forward.
Have other sources of income
Do you solely rely on your income from your regular job? If yes, then you might want to try having other sources of income. If your company decides to retrench or lessen paid days, then it will not hurt you that much because there are other ways to earn money. You can try an online business, or offer services and consultancy. Use your strengths, interest, and talents to expand your goldmine.
Pay down high-interest debt or bills
Review your debt, credits, and bills. Which among these will cost you a high interest if not paid immediately? Which of these offered a low-interest rate or extended credit time? Prioritize those with high interest so that you can save on the added cost.
Build an emergency fund
An Emergency Fund is a personal budget set aside so that you will not resort in using your savings if there are unexpected expenses. If you still do not have an emergency fund, you may start now. Set aside a specific amount for this. The general rule of thumb for an emergency fund is to have an amount equivalent to three to six months’ worth of your living expenses.
Don’t put all your eggs in one basket
Some industries are had been hit hard due to the pandemic while some are still stable amidst all this. Thus, it will be wise to put your hard-earned money on different types of investments. Through this, you can lessen the chances that one economic event will hurt all your assets. You can also consider getting insurance now as this long-term investment will protect you if something awful happens.
Invest for the long term
You may not feel its importance now but eventually, you will reap what you sow. This is also true in stock markets. At first, it will feel that you are always giving and not getting anything in return but when the time comes, you will receive more than what you’ve shelled out.
Never stop learning
Learn a skill you can develop and offer for a fee. Or better yet, upgrade your skills. It’s very easy nowadays to learn as information is readily available at the touch of our fingertips. Read, talk to different people, widen your network, observe, and expand your horizon.
The knowledge you have will come handy at the time of need. For example, you can offer freelance or consulting services based on your skills.
These challenging days will be over soon and will be part of history, but let us not forget the lessons that the pandemic taught us.
“One day you will tell your story of how you’ve overcome what you are going through now, and it will become part of someone else’s survival guide.”
― Ehraz Ahmed
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Joy
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Make sure you have a well stocked bank account is the biggest lesson! The second for me at least is hold steady on your investment strategy.