As the pandemic continues to sweep across every continent, it is no longer just a health emergency, but a financial one as well. Millions of jobs have been lost as countries close their borders and non-essential sectors of their economies to slow the spread of COVID-19.
People worldwide have been feeling the strain on their wallets and their daily lives. The pandemic has changed many of the ordinary things in every life. Children are learning from home, family and friends can no longer gather, and many face layoffs that continue to stretch through another year.
For most people, the pandemic has signified that it’s essential to make changes to how you handle your finances. With less money coming in, keeping your head above water can be a real challenge. Starting by monitoring your credit, tightening your budget, or trying out a title loan calculator to see how much you would qualify to borrow, there are a few critical financial moves that you should be making during the pandemic.
Rework your budget
Now is the perfect time to start reviewing your budget. Start tracking your spending to help give you a clearer picture of where you can afford to cut back. You may be surprised at where much of your money is being wasted. Expenditures like daily gourmet coffees, dining out or taking in food, and endless subscriptions are all items that can be cut from your budget during the pandemic.
Boost your emergency fund
If you don’t already have an established emergency fund, it’s essential to do everything that you can to start putting some money away. Even with vaccines being slowly delivered worldwide, there is no way to tell how long the pandemic will go. Unemployment and stimulus checks may continue to help you pay your essential bills, but you should have some financial cushion for the future.
Pay down your debt
If you are still working, you should be concentrating on paying down your debt. You may be alright while you are still working, but carrying a high credit card balance may not leave you any room if there is an unexpected job loss and you need extra funds. If you have multiple credit card balances, you may want to consider consolidating your debt onto one card with a lower interest rate to help you easily manage your payments.
Add to your 401K
For those that have been spared the unprecedented unemployment, the pandemic should still have demonstrated the reality that financial statuses can change in a heartbeat. If you have a regular paycheck coming in, now is the time to think about your long-term savings. Your 401K may end up being a rescue fund in the future if your financial circumstances should change quickly. Talk to your employer about ramping up your 401K contributions to help put more away if you should need it in an emergency.
Negotiate with creditors
Credit card companies are doing their best to help customers to make their payments during the pandemic. Many companies have been allowing their customers to skip payments without incurring additional interest payments. If you have debt and are having trouble making your payments during the pandemic, you must be proactive with your creditors. Talk to your loan holders and explain your situation honestly and request a renegotiation of your repayment terms. Most lenders are interested in getting paid and are often flexible about managing a new payment schedule.
The pandemic has been devastating both the health of the world and the economy. Staying calm and making some wise financial preparation can help you to stay afloat financially during the pandemic. Follow some of these critical financial moves during the pandemic and remember that we are all in this together.