The effect of the current global pandemic is highly uncertain.
Economies have been pushed globally into a recession, and markets have seen years’ worth of profits recorded by the investors getting wiped off in a few days.
It looms very large and can have you very worried, especially when you think about your finances.
In such a difficult time, you need to take extreme precautions to protect both your health as well as your wealth from getting impacted by the COVID-19 outbreak.
Here are several important money management tips to help you fortify your finances so that you’re able to come out of this crisis with minimal financial damage.
Review your rainy day savings
Having in place adequate rainy day savings is perhaps the most important thing to ensure during such a crisis.
Your savings will come to your rescue if your income gets restricted or you encounter an unanticipated crisis like a medical emergency or a family emergency.
Also, while “adequate” may mean different things to different people, you’ll be well-advised to ensure your emergency fund is worth at least 6 months of your expenses.
You can choose to park those savings in a high-interest savings account or a fixed deposit for some capital appreciation.
Claim the benefits
Make sure you are taking advantages of all the benefits you are entitled to provided by the Government.
There are benefits like statutory sick pay, jobseekers’ allowance, employment and support allowance.
There are also other benefits that top up your income, such as universal credit, where the amount you receive depends on what you have already.
Applying for universal credit can stop other benefits such as tax credits, so it is worth checking before you claim.
Visit the Government website to get information on the benefits you can claim to support you and your family during this global pandemic.
Create a budget and stick to it
Create a budget to know where all your money is and will be spent, and make it straightforward to cut out unnecessary outgoings in the future.
Besides, to be able to free up more money for your essential commitments like building an emergency fund, paying rents, utilities, during this phase, you also need to exercise strict cost-cutting measures.
So, priorities your expenses and cut down heavily on non-essential spends.
Keep all the receipts
After making your essential purchase, keep those receipts at a place where you can find it whenever you need.
Hanging on to all your receipts helps with a week to week budgeting and could mean you avoid shelling out for costly replacements if something needs to be returned or replaced whilst it’s still under warranty.
Try to cut electrical and water bills
Stop leaving electrical gadgets on standby when they are not in use and always turn off the lights in unoccupied rooms to fight rising utility prices.
Also, try to reduce water usage and its cost by taking a quick shower instead of a long bath and using a sink or cooking water to quench plants’ thirst.
Do not discontinue your essential investments
Investments are essential to make sure you meet your life goals and safeguard your finance.
However, several life goals are more important than others.
So, if you are going through a cash crunch, see if you could manage without discontinuing your investments that are essential for your most important targets.
Borrow with a caution
Finally, now many of you would be tempted to take a loan during this time, but take a loan only if you absolutely must.
Try raising cash from other sources like emergency fund and liquidation of non-essential investments first.
Also, do not over-borrow and ensure you have a clear plan in place to be able to repay your loan in full on time before signing up for it.
Your financial woes will only worsen if you’re unable to clear your dues.
Learning how to manage your money does not end here. Seek information from additional resources to help you become more financially stable and resilient during COVID-19. Whether you need advice on paying rent and utilities, finding free health, fitness and wellness services, or applying to government relief programs find an accountant who can guide you through this.