COVID-19 has made life difficult not only for businesses but also for individuals. Because many companies were forced out of business, a lot of people also got laid off and lost their source of income. The pandemic has taught people how to take care of their health and manage their finances. Here are five money-saving ways people have learned during the pandemic.
1. Save Up On Emergency Funds
A lot of people lost their jobs because of the pandemic. Unfortunately for some people, they were not able to set aside some money for emergencies. Most people probably don’t have emergency funds because they thought it is better to spend it than to leave it sitting in their bank account. COVID-19 taught people the value of having an emergency fund as a safety net. The rule of thumb for emergency funds is to save between three to six months’ worth of living expenses to cover unexpected bills or crises. It should be a liquid asset in the form of cash or a savings account. An emergency fund can be your first line of defense against debt.
2. Invest In Life And Health Insurance
With COVID-19, people have realized the uncertainties of death and sickness. In a global health crisis, you need to be prepared for these uncertainties. Although you do not want to die too soon or get sick, not being prepared could wipe out your life savings and future income. COVID-19 related treatments cost millions, so having health insurance can help cover the hospital and medical bills you may incur. Also, you will have the peace of mind that your family will be financially taken care of in case of untimely death. The best time for investing in a policy is when you are still healthy.
3. Find Opportunities To Grow And Invest Your Money
During a pandemic, you may be having second thoughts about investing on stocks or other investments. However, experts say that this is the best time to invest when the prices of stocks are low. As the phrase goes, “buy low, sell high.” If you have extra funds, spend it on stocks or mutual funds. When the pandemic is over, the stock market will recover and you could finally be earning the fruits of your investment. If you are just new to stock market investing, you can work with a financial advisor or stock broker.
4. Diversify Your Income
Finding diverse sources of income can help you through a pandemic. If you have other skills, make the most out of it as it can help you improve your financial cash flow. This way, when one of your income sources closes, you can still have continuous income. The more income streams, the more security you will have.
The number of income streams will depend on your financial standing and your future financial goals. You can start off with at least a few income streams. While there is still a pandemic, you might want to learn a new skill or gig that might give you additional income.
5. Plan Your Expenses
The pandemic may have affected not only your current but also future finances. Financial planning, prioritizing your expenses, and using your resources wisely can help you become financially stable. Ask yourself if you are spending your money wisely. To plan your expenses, make a budget and stick to it. It all starts with being aware of your spending habits. You can use a budgeting app to help you monitor your expenses. In this time of pandemic, it pays to have extra money that you can use for an emergency. These 5 hacks can help you save funds.