Tips To Stay On Top Of Your Finances During The COVID-19 Pandemic

It’s safe to say the COVID-19 pandemic has had a significant impact on the finances of people around the world. You may have had to take on more jobs or switch jobs just to keep the money coming in every month. With all of this uncertainty, it can be hard to stay on top of your finances. Thus, you must have a plan in place so you’re not scrambling when disaster strikes.

In this blog post, we will uncover what t you can do to help keep your finances safe during this time of uncertainty.

The Financial Impact of Covid-19

The 2008 financial crisis is an excellent parallel to Australia’s current COVID-19 episode. Apart from its purely financial dimensions, the economic downturn has been compared to most other recessions and even in some ways to the Great Depression around the 1930s where demand was impacted significantly.

We are seeing that the recent recessionary COVID-19 shockwaves have hit both consumers’ willingness and ability to purchase things they need due mainly because their income has fallen.Australia is currently experiencing a crisis caused by COVID-19, which has also led to widespread shortages of many necessary goods.

This shortage draws its power from restrictive labor laws and an inefficient supply chain in Australia that are both factors at play here. However, there’s also been some difficulty collecting data on this topic due to limitations imposed by government regulations.

The current data shows that COVID-19 has a more significant impact on the economy than what happened in 2008.

Be Prepared

An emergency may occur anytime. This is why it’s essential to be prepared for what might happen. With the following steps, you can  increase your chances of being financially prepared for any emergency in these testing times.

  1. First off, have at least three months’ worth of expenses saved up in a liquid account so that if you lose income during this time, you’ll still be able to cover your living costs.
  2. Keep six months’ worth of expenses saved in an emergency fund for emergencies like sudden medical bills.
  3. Lastly, it’s essential to save money and spend less than what you earn so that your savings will grow over time and provide financial stability during challenging times.

Prepare Budgets and Spending Plans

A budget is an estimate of your income during a set period, such as one month. Your expenses are then compared to that figure for you to determine if there’s enough money left at the end of each month to put into savings or additional investments.

On the other hand, a spending plan gives you a general idea of how much things cost and how much you can afford per day or week without going over budget.

Since the COVID-19 pandemic has taken a toll on people’s financial health, it is crucial to take precautions and prepare budgets and spending plans for the future. A budget can help you prepare for a variety of situations that could arise during this time.

The most obvious reason to prepare a budget is that it helps keep your spending on track so you do not overspend. If you stay within a set limit, there will be no worries about going into debt or not paying the bills at the end of the month. 

It also gives you a chance to save money for emergencies and long-term goals, such as retirement. One word of caution is not to make any big purchases without first consulting your financial planner.

Keep an Emergency Fund

Many people have found their finances to be in jeopardy during the COVID-19 pandemic. The best way to prepare for this is by having an emergency fund in place that can cover you in times of need. A good rule of thumb is to have at least three months’ worth of expenses saved up and readily available if needed.

Check If You are Eligible For Govt Benefits

Many governments throughout the world are providing many resources to help those who are struggling financially because of COVID-19. Some of these resources include:

  1. Housing assistance programs
  2. Food stamps
  3. Financial assistance for necessities like gas or heating bills

Talk To Your Creditors

In the wake of COVID-19, many people are experiencing financial hardship. This includes those who owe money to their creditors. If you find yourself in this position, there is a way out.

Talk to your creditors about an income-based repayment plan and see if they can work with you on a monthly payment that fits within your budget. You must understand that not all debts will be forgiven during COVID-19, but most can be stretched out for up to five years through these plans.

Revise Your Financial Goals

You may not think that this virus has anything to do with your finances. Still, the truth is that during COVID-19, people are more likely to make bad decisions in their personal lives.

They may spend too much money on things they don’t need or borrow money when they can’t afford it. As a result, you should be reviewing how much debt you have right now before times get tougher.

The Last Word

One can’t undermine the fact that the COVID- 19 pandemic has affected people’s health and livelihoods across the world. With this in mind, there are several things you can do now to help protect your finances. As we work together to fight this devastating virus through prevention or cure, make sure that your money isn’t also at risk.

If you need any more tips on how best to safeguard yourself in these tough times, reach out to us for personal finance advice. We’re always happy to answer any questions you might have about managing your wealth during these trying times.