As the world tries to come into terms with the Coivd-19 pandemic, a lot of Americans are starting to feel the importance of their emergency fund. This is because as soon as you start hearing about a virus spreading not only throughout the country but the whole world, you start going back to basics. You try to secure your family’s most basic needs especially food and even medicines.
As you see a lot of people starting to panic and fill up their grocery carts with more food and supplies than they can carry, you might start to do the same. You begin to fear the possibility that there would be nothing left for you if you wait around. However, this should not be the case and people who are doing this are only making matters worse.
What do we know about Covid-19?
Your emergency fund will play a big part in helping you manage your finances only when your income is affected. This is because a lot of companies are starting to scale back as this pandemic has started to affect operations. There are a lot of consumers who prefer to stay at home and this takes a toll on businesses.
Globally, there are over 130,000 affected by the virus but the mortality rate is low and the recovery rate is high. However, some people believe that it will only get worse before it starts to get better. This is one of the reasons why a lot of people are out and about trying to buy as many supplies they don’t need in case it drags out.
In the country, Disney World is closing its doors as well as Broadway. Mass gatherings and even schools are discouraged to prevent the spread of the virus. Some big sporting events such as the NBA, Major League Soccer, and even the NHL are putting their seasons to a halt. This is one of the reasons why the government declared a national emergency to tap the federal government’s full power on battling the virus.
Assess where you are with your finances
In the midst of the virus and ensuring you and your family’s health, you need to take a close look at your finances as well. There are instances when your income might start to get affected. The company you are working for could start cutting work hours. Some might even close for a time and you do not earn anything during these months.
Take a look at your household budget and determine where you are at present. Look over your income and expenses and make sure everything is current. The last thing you need is working on a dated budget and using inaccurate information to make important financial decisions. This can put you and your whole family’s finances in peril.
Start cutting down on your expenses
It is a good idea to target your expenses and find a way to cut it down. You need to work on a frugal budget to help you save money and strengthen your emergency fund. This way, you will have the money you need if your income is threatened by what is happening in the economy. A lot of people are affected all the way from regular employees to business owners and even the top athletes around the world.
There are studies that show how the virus can spread more easily in the gym. It might be time to freeze that membership in the meantime and look for ways to exercise at home first. There are bodyweight exercises you can look into to still keep in shape while staying at home. This could also be a good time to get started on that DIY project you have been planning on rather than hiring help to do it.
You can also get the chance to start cooking your meals at home. This saves you money from having to order food at home. This is important as NY Post shares that Americans spend about $70,000 on takeout and delivery over their lifetime. This is a lot of money you can save and use to put into your reserve fund and strengthen it.
Evaluate your emergency fund
You also need to take a close hard look at your reserve fund to assess where you are at the moment. If you have set a target on how much your reserve fund needs to be, you should be close to that target already. Of course, if you are just starting this year, you could still be far off from your goal but if you have been saving for some time now, you need to be closer to your target.
As mentioned earlier, it is a good practice to start cutting down on expenses. This will help you stretch out your emergency money to cover a longer period of time. The more it can sustain your expenses, the better off you will be. If you do not work because the company you are working for had to suspend operations, you will have to rely on your reserve money for your daily expenses.
If you never paid any attention to saving for a rainy day and the time comes you need one, you will start looking for other ways to cover your expenses. During these times, your credit card could take the burden of paying for the things you need. This can complicate your finances further especially if you fall behind your payments on your card.
Your emergency fund will help you get through challenging points in your life so you can concentrate on looking for ways to normalize things. In times like these, it is quite difficult to stay calm especially when everyone else around you are starting to panic and buys more than what they need in trying to secure basic goods.
It is also important that at times like these, you need to be very cautious about what you share online with family and friends. This is a time when people get scared rather easily and the wrong information shared can cause panic among people. It is important to get updated but you need to verify the data you come across before sharing it with others.
Steps you can take to keep safe
Now that you have an idea of how to manage your emergency fund in light of the pandemic around the globe, it is also a good idea to take care of yourself. Here are a few things you can consider to help keep you stay healthy and safe.
If possible, work from home
There are several industries equipped to survive or even thrive during these times and one of them is being able to work from home. Obviously there are industries where this would not be a possibility just like with blue-collar jobs. However, there are a lot of companies that can support this type of set-up if they aren’t doing it already.
Technology has made telecommuting a lot easier where employees get to work from home. Internal and external communication is a breeze with various platforms online. Design and other creative output needs can also be done at home. This is something you and your company seriously need to look into to help with the continuity of the business.
Observe proper hygiene and social distancing
One of the best ways to help you combat the pandemic is to observe proper hygiene and practice social distancing according to CNN. This way, you lower the chances of being infected or infecting others if you already have it. At the end of the day, it is a virus that spreads from one person to another and one effective way of stopping it is staying away from a lot of people
Your emergency fund will play a crucial role in helping you fight off the pandemic and keep your finances in order. It can help keep you afloat for a few months until everything goes back to normal.