Due to the pandemic, tens of millions of people have fallen into financial insecurity and struggle. However, not every single individual has been stuck in this kind of situation.
According to a survey conducted in April 2020, 24% of Americans said that COVID-19 had not impacted their financial standings at all. Though this number would’ve changed by this point. Companies announcing layoffs, cutting salaries, stopping 401(k) match programs all the while people are in search of other means of growing their budgets.
Whether you’re an essential worker or you’ve managed to find work by other means during this pandemic, it’s important now for you to keep both yourself, as well as your financial future healthy. This pandemic has brought a lot of uncertainty with it, and so, it’s important that we all prepare ourselves for the future. After all, you could lose your job next month.
If you’re in the position where you have some level of financial stability at this point, it’ll be a smart idea to incorporate some new financial goals into your life. Through these goals, you’ll be able to emerge from this economic crisis in better shape than when you entered into it before.
Turn Your Expenses Into Savings
This pandemic has turned everything around, including expenses. For example, since most are either working from home and keeping social distancing (so no Uber or Lyft, etc.), your car is probably sitting idle. The thing is – in some households that money is saved, but then spent further on food for kids who are at home all the time.
Though not every single household has hungry kids that need to be taken care of. For those such individuals, a good option would be to take a lot of those savings and put them towards the reserves.
Ideally, you’ll always want to be sitting on three to six months’ worth of living expenses saved up as an emergency fund. If it’s too intimidating, make an effort of starting with one month and then build it up gradually by another month and then another.
And if you already have an emergency fund all saved up, use the money you’d spend on commuting, gym memberships and travel to work on some of the other goals mentioned below.
Pay Off Debt – Especially Student Loans
By this point, student loan repayments are starting to back up. And while many people are still not able to pay them back, you might have better odds to work on this problem right now.
Before getting into those details though, it’s worth looking at your own financial circumstances before you start paying down your loans. Even now, that money that you’ve been saving up could be used for something else that requires far more precedence than paying off debt.
On top of that, it’s worth looking into the many forgiveness programs available. If you’re on track for either the Public Service Loan Forgiveness or some other program, making payments right now wouldn’t be the best option. It’s smarter to put that money towards savings or some other methods that could earn you more long-term.
Boost Your Contributions In Investing Programs
Another lofty goal is to be working towards your investment strategies. Whether that’s putting money into a 401(k) or an investing portfolio, these sorts of things can give you an edge at the moment.
For one, stock markets are still recovering from the crash and 401(k)s are still quite reliable too. Make an effort in maxing out your 401(k) if you’ve got the chance.
Save Money On Mortgages
Another sort of blessing that COVID has brought is lower housing costs – even though millions are still facing evictions in the rental market. On the housing side, mortgage interest rates are the lowest they have ever been and it’s worth looking into whether you can refinance or not to get advantage of those numbers.
On top of that, it’s more appealing now for people to get their own homes due to the lower rates as well. Even having a drop of 1% can mean so much in the long term. The only catch is that due to these lower rates, it could be harder to take advantage of these.
Support Your Community
While this doesn’t improve your own financial situation, it can make a big difference in so many ways. Small businesses have closed up due to the virus, but also due to the lack of financial support. We wouldn’t say it’s your duty, but if you do have financial stability right now, being able to give back in some way can mean so much. Beyond that, you can also consider donating food to the local food bank.
In the end, personal finance isn’t always about building up your own wealth. It’s also about spending towards the things that you value.