It’s The End Of The Pandemic, What Should You Do Now?
While vaccinations are rolling out, establishments are slowly reopening, and institutions are going back to normal, it seems like we’re approaching the end of the pandemic. What now? The past 24 months have shown us nothing but uncertainty.
The economy has been shaken up by the unimaginable. Economic volatility, widespread unemployment, bankruptcy, and many other economic implications have forced us to look at our finances in a different way. If you have lost your job, income, or business during the pandemic, now is a great time to improve your relationship with money.
Experts suggest seemingly similar steps to take in order to improve your financial planning. Saving for uncertainties and cutting back on expenses are familiar themes. Nonetheless, there are actionable steps that we can take to make sure personal financing is better now than ever.
Decide on your financial goal
While it may be easy to think that financial planning may entail cutting and saving a specific amount- it’s actually more than that. More importantly, it’s vital to look at the bigger picture. You have to decide on your financial goal before you plan. There are many questions that you can consider when deciding on your financial goal. Here are some of them:
- What kind of lifestyle do you want to have in the next 5 years?
- How much risk are you willing to take in your portfolio?
- What kind of work do you want to have in the next 5 years?
- How much savings should you have?
- What kind of return of investments do you need to have?
Questions like these can help you decide better on the financial plan that you need to have. Once you find out the answers to these questions, you can have actionable steps towards your long-term goals.
Some of the answers to these questions might have changed in the last year due to the effects of the global pandemic. Some of our priorities, plans, and goals have changed. Now is the time to get a clearer focus on your goals.
Assess your cash flow and spending
For some people, the pandemic has decreased their cash flow. This may be due to furloughs, closure of businesses, or change of jobs. For others, the pandemic has increased their cash flow. With the transition to technological means, many have found a new niche in the technological industry. For another group of people, their cash flows haven’t changed. No matter which group of people you belong to, your state of cash flows is an important consideration in terms of financial planning.
When it comes to spending, the pandemic may have changed the total expenditure of some people. Because of the limitations that the pandemic has brought to eating out, traveling, attending events, and the like, some people have significantly cut out their expenses. This means that their savings have also increased.
Keeping track of your money is important now that financial security is on top of the mind for many people. If your cash flow has decreased due to the pandemic, it’s important to change your lifestyle and cut back on discretionary expenses. It may take some time to recover from the financial effects of the pandemic, but know that there’s always an efficient way of doing things.
Stay within your budget
The saying “Live within your means” is probably a no-brainer for people who are trying to plan their finances. However, it couldn’t be stressed enough. The pandemic has caused people to stick to their budget due to uncertainty. However, with the recent reopening of establishments, lifting of travel bans, and resuming of social activities, we can be tempted to splurge and catch up on what we missed.
While there’s nothing wrong with enjoying and rewarding ourselves after an economically, mentally, and socially taxing global pandemic, it’s important to stay within our means. As mundane as it may sound, financial prudence is all about discipline, and for most people, this has been the biggest takeaway from this pandemic.
Make emergency fund a priority
This goes without saying- but the pandemic has taught us to save up for the rainy days. Emergency funds may not be a priority for some people, but having one in times of crisis is definitely a way to save yourself from getting into debt.
Moreover, old norms pertaining to emergency funds may no longer apply in the new normal. The usual rule of thumb is to save at least three to six months’ worth of expenses. With the pandemic showing us how easy it is for us to lose jobs, savings, and sources of income, it’s high time to level up our savings game.
To save our finances, our families, and ourselves from unexpected passing, increasing the worth of our emergency fund can not only prepare us for unexpected situations but can also give us peace of mind.
Many people would like to say, there’s no going back to the normal way of doing things. The pandemic has changed us and will continue to change our lives moving forward. While these uncertainties are inevitable, we can be resilient when it comes to our finances.