How to Save Your Personal Finance During the Pandemic?
Do you have a financial nest egg for a worldwide pandemic? Of course not. No one saw this coming, and unless you have a very well-planned saving strategy for retirement or are independently wealthy, you are probably burning through your money reserves faster than you ever thought is possible.
No time to panic
Unless you are an “essential worker” or have a work-from-home job, you are likely to have been laid off without future compensation. And having one way of income, or no income is many peoples’ worst fear. Not knowing how the bills will get paid or concerns overfeeding your family are the largest thoughts plaguing society right now.
Spend money just to kill time is now a thing of the past. Fortunately, many of the things we have to temporarily cut from our lives will still be there after this pandemic ends. If you have to cut streaming video service, they aren’t going anywhere, so you can get it back. If you love online gambling, your favorite casino will still hold those 20 free spins , and it is OK to visit them again.
Instead of dwelling on what we are missing, use this as an opportunity to get yourself on level, and it will take some mental rearranging. Making a list of what you need versus what you want, and being logical, not emotional, may very well decide your financial survival.
The pandemic shuffle
If you are in the medical field, with a pharmaceutical company, or making supplies for hospitals, then you are most likely flourishing, but for everyone else, personal finance and COVID-19 are mutually exclusive. The way the world works is money comes in- money goes out. If no money comes in because everything is shut down, then there is no money to support business, and so forth.
In the past, you knew how to manage personal finance. It was easy. Make the money, then spend it on bills, food, rent or mortgage, clothes, and maybe even a vacation. But personal finance during pandemic times are not so different, just a lot tighter. Fat is trimmed, belts get tightened, and frivolities are removed in exchange for requirements.
A mental adjustment
When you are used to spending every dime you make, adjusting your brain to accept that you make nothing, or are supported by unemployment checks, can be tricky, so here are some rules of personal finance for beginners:
1. Know your money
Account for every dime and use a personal financial planning app to keep track of it. And use one of the free ones. You don’t need to spend money on an app to save money; its counterintuitive. Know where every dime is, and where every dime must go. And this does not include things like online subscriptions that reoccur every month. Until further notice, those need to go away. You can get them back later.
2. Make a budget
We know. You can hear your mother’s voice in your head telling you how important budgeting is. And she was right. The easiest way to know where you need to allot your liquid cash is with a personal finance budget. You must get your personal finance organized.
Start with bills. Then food. If you are quarantined, your fuel budget should be low, so that is not as critical as food. And then, stop. Everything else is frivolous. If you can afford to maintain one streaming video account, make it a cheap one. We never said to cut the phone or the internet, because they can be your lifeline to the world. Maybe just drop it to a cheaper plan.
3. Call your creditors
One thing that has been fascinating about the quarantine is temporary debt forgiveness. Since this is affecting everyone, then even the credit card companies are getting punished by the pandemic, and they feel your pain. And they are very conscious. So, give them a call, let them know your situation, and see if they can work with you. Many of them are doing it without you even asking.
4. Plan ahead
We are now living in the “new normal” and it is the perfect cautionary tale. We know that the future is even more uncertain than any of us thought, and making a plan for the next worst-case-scenario is both wise and prudent.
When the world opens up, do something fun, go have a meal outside your home, and be a good neighbor. But don’t drop back into old habits. The pandemic is a tool to teach us humility, respect, and self-improvement, being prepared for further situations. Don’t live in fear, but be aware that things can go south very quickly.
How to return to self-reliance
Walk a mile in a man’s shoes, and you will understand his pain. Many of us see welfare and unemployment as the tools of the lazy, and an opportunity for the system to be taken advantage of, while everyone else pays for it. But now, the same voices are collecting government check because that is the only option they have left.
What is more alarming is how easy it was for many people who used to love having gainful employment to enjoy the sedentary life living off the taxpayer dime. They have become complacent, and in that have lost self-reliance. And they can’t be blamed or judged for it. What other options were there? Everything closed down.
But what happens when the world returns to working order again? The hope is society will look to the job market again and fill those vacant positions; that personal finance for self-reliance will become important again; and that we will remember how personal finance is important for keeping the wheels greased and the earth spinning.
So, what can we do?
Oh, the times, they are changing. But the personal finance rules remain the same.
· Don’t spend money you don’t have.
· Don’t live beyond your means
· Don’t apply for credit cards you cannot afford.
In short, keep your spending in check.
If this is a problem, there is personal finance help available. Dave Ramsey is a financial consultant and guru that always has plans to get people on better financial footing. His program ‘Money matters” is an invaluable resource with some great personal financial information.
Problems with personal finance and coronavirus are everywhere, so there are financial planning agencies that work cheap and are available every day to be your personal finance guide through the mire of the “new normal.” They can and will help you because they are suffering, too.
Living in the post-pandemic society
Unless you are a selfish human being, you are wearing a mask to keep yourself and others from getting sick. Many places require them, and others just recommend you wear one for your protection. Things are sterilized more vigorously, businesses are vigilant about social distancing, and hoarding has become the tool of humanity.
The pandemic has changed some things and revealed others. And for money, what it reveals is that we spend our money foolishly. So, it is time for a change. It may never be again that a global crisis hits us head-on in our lifetime, but it doesn’t mean we should neglect teaching proper financial planning to our children.
The value of money is exactly what it was yesterday, and how much it will be worth tomorrow. The use of that money has to change. The spending with reckless abandon has programmed us to think such a thing is not only normal but fun. And buying what you want, when you want it, in the spirit of instant gratification is everyone’s God given right.
And then a virus hits, that shakes the fabric of what we know and cherish. And we clamor to our leaders, to our banks, to our friends, to save us from ourselves. We look on all our things and think, “what was I thinking. Why did I buy the 60-inch TV when the 55-inch was just as good and half the price?” Hindsight is always 20-20.
The bottom line is this. Learn from the pandemic. Grow as individuals, as humans, and take the lessons this horrible situation has taught us, and use them to do better. Teach your kids what you have learned and how it has made you better. They look up to you. Show them the way.
Conclusion: Personal finance isn’t a hard riddle to solve. But the first step is you must want to solve it, thinking pragmatically, rationally, and without impulse. And if you even have to choose between your house payment and your payment, pay the car. You can live in your car, but you can’t drive your house. How have personal finance issues affected you during the worldwide pandemic?
Author’s Bio
Ellen Royce is known for his guidance in personal finance. She is a public speaker and she shared valuable insights on her talk shows. In her book Retire Inspired: It’s Not an Age, It’s a Financial Number, she tells us how to manage our finances better and how we can come up with strategies to achieve this goal.