30 Jul How to Manage Your Finances During a Pandemic
Covid -19 has shocked the world, it has rendered the closure of prominent businesses, changed the landscape of how we do things and literally, stopped the world! The world we know was forced to evolve, and migrate to the digital platform in the blink of an eye. Online transactions which used to be crawling it’s way into our lives suddenly sprung to life. The Pandemic proved to us that change is inevitable and we have to open our minds and adapt.
Here are a few disciplines I’d like to share with you which you can embrace, pandemic or no pandemic:
Balance your income versus your expenses. Balancing means, you would need to consider that your income has to be allocated based on priority, Basic Needs (food, clothing, shelter), Emergency Funds, Risk management cost which covers life and health insurance. After these 3 has been addressed, the remaining will be for the collateral expenses like new clothes, bags and the likes.
Explore other possible sources of income besides your main source of income. Given that the Pandemic has proven that keeping a single income source makes us vulnerable, it is important that we create multiple income stream.
Ensure that your emergency funds are in place; take note, emergency funds should ideally be 6 months worth of monthly expenses, 6 months will give you ample time to find another income source. Deposit this to an account where it is easily accessible, ideal for this are mutual fund money market fund with a relatively better earning potential of around 2% per year, or the regular savings account.
In Risk managing, it is important to take into account to create back up for medical expenses through medical insurance, note that the pandemic has caused a substantial increase in medical expenses, because of the health protocols and the increase in demand.
In managing your finances, always bear in mind that we that with LIFE comes RISK, thus, it is important to have cash on hand and risk management portfolio on the other hand. Cash for the immediate and risk partners to share in your family’s expenses at the time of need. Planning and Foresight will get us through the hard times.