Due to the coronavirus, millions of Americans have been asked to remain home as non-essential businesses and schools close to slow the spread of this very serious illness. It goes without saying that the health and safety of you and your family is a top priority during these crazy times. Yet, with many people out of work and unable to provide for their families, one can’t help but wonder how effective financial management could have made this difficult transition a lot easier.
These changes have altered the lives of everyone from the rich and famous to the working class, teaching everyone a few key financial lessons.
You Need an Emergency Savings
If you didn’t have any money tucked away, this pandemic has likely caused a financial strain on your finances. This is especially true if your household has gone from two incomes to one or you’re unemployed. You no longer have a steady source of income to cover the bare necessities.
An emergency savings with 3-6 month’s worth of expenses in it, however, would have given you the funds you needed to pay your rent/mortgage, utilities, groceries, and other essential needs until you’re able to find another income source. Fortunately for those who still have a job, there are quick installment loans that can help bridge the gap.
Though things are a bit tighter now, it is still ideal to start an emergency fund. You can put aside a few bucks each week, sell some items you don’t need for a few extra bucks, or find ways to earn extra money online to provide yourself with a nest egg.
You Don’t Need Half the Things You Spend Money on
With millions of non-essential businesses temporarily closed, it has become a lot more complicated for consumers to indulge in certain products, services, and activities. This, of course, should have taught you something very valuable – you don’t need half the things you spend money on. From your daily cup of coffee and takeout lunches to weekly trips to the barbershop or nail salon, the coronavirus pandemic has eliminated access to things you may have once thought were of importance.
A great idea (if you can) would be to take the money you would have normally spent on these things and put it in a jar or a savings account for the next few weeks. Not only will you be surprised to learn how much you were actually spending, but this additional cash can be used to create emergency savings, pay down debts, invest in a business, or save for your future (i.e. college or retirement).
You Should Never Put All Your Eggs in One Basket
The unemployment rates in the US have reached record numbers not seen since the great depression in the 1930s. There are literally millions of people across the country that have no way to earn a living. Without any idea as to when this pandemic or altered way of living will end, this can be rather frightening to think about. This is especially true for those who don’t qualify for unemployment benefits.
If you’ve learned anything from this pandemic, it’s that you should never put all of your eggs in one basket. Everyone should have another source to fall back on financially. For some, this could mean taking on a part-time job while others might consider looking into investing or starting a side gig. There are plenty of opportunities out there to make money, and tapping into at least one or two of these is recommended so you have the cash you need to care for your family.
Frugal Living Should be a Way of Life
Last, but not least, the coronavirus should have taught people that frugal living is best. Those who have practiced living within or below their means will likely do better in these uncertain times than individuals who live paycheck to paycheck and have a ton of debt.
Now would be a good time to start living frugally. You should create a budget, learn how to cook at home, clip coupons, get rid of things you don’t need, and only purchase things you can afford to pay cash for to reduce your debt.
The coronavirus pandemic has done more than force people to remain safe in their homes, it has also caused millions of Americans financial strain. Though nothing can be done to go back in time and change your financial habits, if nothing else, you should use this current pandemic as a lesson to begin preparing yourself and your family for the future. From creating an emergency savings account to adopting a more frugal lifestyle, these changes can be the very things to help you to better provide for those you love most.