Yes, the pandemic has upended many industries and businesses, and millions lost their jobs. It reshaped the economic landscape and the way we work and live. More than the businesses that have closed and job arrangements that have been changed, the pandemic taught us a few lessons about money, finances, and life in general. Read on, and find out if these lessons and realizations also ring true for you.
Always Set an Emergency Fund
For many people, an emergency fund is not a requirement. There’s a job that pays the rent and bills every month, so why set aside an emergency fund? However, some people learned a bitter lesson during the COVID-19 pandemic. Many companies and businesses slowed down, cut back on spending, and closed altogether. This resulted in massive layoffs leaving hundreds of thousands of workers and employees out of work in the middle of the pandemic. And since they don’t have an emergency fund in place, life became difficult. The pandemic taught us the importance of having an extra fund that we can use in case of layoffs or medical emergencies. And many individuals learned this financial wisdom late in the day.
So is there a recommended amount that can serve as your emergency fund? Well, different people will have varying ideas on how much your fund should be. But for many experts and financial websites, a reliable emergency fund should cover from three to six month’s worth of household expenses. To build your emergency fund, you need to cut your expenses and consider any additional income.
Diversify your Investments
Investment is now mandatory if you’re planning to live a comfortable life. For example, you can put some of your money in the bank, some on the stock market, or you can run a small business. However, the pandemic taught us one more lesson when it comes to investments and growing your money. It’s equally important to diversify your investments so that you can still rely on a steady stream of passive income even when the times are tough. For example, if you just rely on a physical business, then there’s a big chance that the pandemic has affected its operations. Due to a lockdown policy, many businesses were asked to close momentarily, putting some businesses in the red. And if you don’t have a back-up business or a deep pocket, the policy can deeply impact your finances.
Use Apps, e-Wallets to Start Managing Your Money
During the pandemic, our actions and movements were limited. Due to the lockdown policy of many national and city governments, individuals were forced to stay at home. And when allowed, these are only for essential purposes like buying food. This limitation in the movement became a problem for many individuals especially those who need to attend to their businesses and investments. However, this led to the development of another sound financial practice- the use of apps and online banking for saving and investing. If you want to get more information click here to “Finance Mode”, which will give you some ideas from the Japanese Finacial site.
Today, online banking and shopping are now common practices for many. With online transactions, there’s no need to go out and risk contracting the virus. And speaking of finances, you’ll now find several apps that can help you with your finances:
- Your bank’s mobile banking app. The pandemic helped shaped the banking landscape by offering depositors a modern way to complete banking transactions: the use of mobile banking apps. Sure, these apps were already in place even before the pandemic. But the popularity of these apps increased during the lockdown.
- Online wallets. Just like banking apps, online wallets like PayPal and Skrill have been around for a long time. However, they became more helpful and reliable at a time when people are at home and cannot physically visit banks and shops. These popular e-wallets allow consumers to send and receive money through the use of mobile phones. Also, these e-wallets allow you to invest in equities and other instruments without leaving your home.
- Free apps like Mint and PocketGuard. Compared to the first two examples, these free apps allow you to budget your money like a pro. PocketGuard, for example, lets you connect your savings and credit card accounts and detects your income and recurring bills. With these notifications, you can easily manage your bills and ensure that you cover all bills on time. Also, these apps will let you identify a savings goal and provide you with reminders to stay on track.
These are just some of the many lessons the pandemic taught us. It may have affected many of us financially, but it also made us stronger by teaching us some important lessons. So, if you haven’t started your journey to financial freedom, then now’s the best time to make it happen.