The coronavirus pandemic and the changes that followed rocked the finances of American households nationwide. Millions of adults lost their jobs, rendering them incapable of caring for their families as unemployment benefits took weeks to receive. Those who were fortunate enough to maintain their jobs suffer the burden of being a breadwinner as they stress over potential eviction, foreclosure, utility shutoffs, and rising food expenses.
There’s no denying that financial pressures are at an all-time high with no signs of slowing down anytime soon. Though there’s not much you can do to change the past or present; you can use these dire times to improve your finances and secure your future. Here are a few valuable lessons you can take from the pandemic to get started.
You Need an Emergency Savings
As you can see, life can take a dramatic change when you least expect it. That’s why you need to be prepared. An emergency saving serves as a nest egg that can sustain you and your family through difficult times. With at least 3-6 months of expenses in an account, you’d have the means to cover the cost of living. It would also allow you time to find an alternative financial solution.
While things are rough right now, you can still create a financial cushion. Whether you put $5, $25, or $100 a week in a bank account, it can come in handy when you need it most. Open an account with a trusted financial institution and commit to depositing a weekly amount in the account. Don’t use this money unless you have no other choice. Within a year, you could have a few hundred or thousand dollars at your disposal.
Keep Debt To A Minimum
Another lesson you can learn from the national health crisis is keeping debt at a minimum. When you’re inundated with bills, it reduces the amount of money you have to cover necessary and current expenses. Not to mention, when you’re unable to keep up with your bills, the costs increase, and your credit takes a plunge.
Eliminating debt, especially during the pandemic, may seem challenging, but it’s not impossible. You can contact creditors to negotiate a reasonable payment arrangement. You can pay more than the minimum balance to reduce your principal balance. There’s also the option to consolidate your debt through sites like MemphisAssociates.com. Consolidating your debts into one small monthly payment can save you money on interest and late fees while digging yourself out of the hole faster.
You Need a Side Hustle (Or Two)
The coronavirus pandemic has caused job security to decline. Even those with a job have no idea whether it will be there tomorrow. As you might imagine, having more than one income source could help you get through hard times.
Obtaining another full or part-time job may be too time-consuming. On the other hand, a side hustle is something you do on the side to bring in more money. There are plenty of ideas you can start with little investment or resources, just brainstorm on twitter or facebook in one of the many entrepreneurship groups. Once you start making money, start using it to create emergency savings or pay down your debts. Should you find yourself unemployed soon, you can scale your side hustle to a full-time business to supplement your income.
You Must Secure Your Future
These unfortunate times have taught everyone the importance of securing a financial future. While surviving the here and now is essential, the uncertainty of what tomorrow may bring should encourage you to prepare.
There are several financial steps to take to secure your future. For starters, you should create an estate plan, living will, and acquire life insurance. Should something happen to you, you want to ease the financial pressures for your family. You should also look into investment opportunities and retirement accounts to create long-term income.
These chaotic times are challenging to deal with. Many people have no idea how they’ll make it from one day to the next. Though the financial pressures of surviving the pandemic are plentiful, getting past them requires strategic planning. Take the lessons discussed above and begin developing a financial strategy that will safeguard your family today, tomorrow, and for the foreseeable future.