The pandemic could have forced you to adapt to new money management habits to be able to survive. The question now is if you need to carry them over as the economy slowly opens up.
It has been a very challenging time for many Americans especially during the first few months of the health crisis. Health care facilities were running out of beds for patients that are coming in. Health care workers were all pulling in double shifts while some of them were being infected by the virus. This later on rippled out to the economy.
In a bid to get the infection under control, people were asked to stay home for extended periods of time. This meant that a lot of companies had to adjust quickly especially in terms of their operations and manpower. But not everyone was able to pivot and adjust. As a result, many businesses went under and were forced to close shop. Fortune news shares that almost 100,000 businesses went under towards the end of 2020.
This put a lot of people out of a job. Americans were forced to adopt new money management habits to help them overcome these financial challenges. Now that the economy is slowly starting to pick up, does it make sense to continue with these new financial habits? Will it still hold true and help you manage your finances better?
There are some habits worth keeping. Here are some of them you might want to hold on to for a longer period of time.
Save more and spend less
During the height of the health crisis, a lot of Americans saved more and spent less. This was mainly due to the fact that their income was severely impacted by the pandemic. If you are earning less than what you were getting before, there is a big chance that you would be forced to put a tighter grip on your current income.
For some that were not immediately affected by the layoffs, they could still be doing the same thing out of fear and uncertainty. It does not help to hear news about several companies closing down one after the other during the height of the health crisis. Even if you were not affected, you feel reluctant to spend the way you in the past.
The result is that you tend to spend less money and save what you can. This is because of all the uncertainty that the crisis brings. You never know if you still have a job tomorrow when you wake up. There are also some companies who are giving out feelers to their employees saying that the company is not doing good and people will have to go.
But if you are now in a better situation, it is a good idea to continue with this habit. Spending less and saving more can definitely help you reach your financial goals.
Using a household budget
In a bid to stay on top of your finances during this health crisis, you could have found the importance of having a comprehensive household budget. It gives you the chance to monitor your income and expenses at any given point in time. Before you make any decisions, taking a quick lo at your budget helps you understand if you are making the smart decision.
This is one of the money management habits that you can take with you regardless of what the situation is. Even if there is no pandemic, having a household budget will remain to be one of the most important tools you will have under your belt. Remember that it needs to be as comprehensive and truthful as possible. Otherwise, you will just be fooling yourself if you pad up your income and lessen your expenses.
Informed financial decisions can give you the edge you need in trying to pivot in and out of different challenging situations. Do you need to pay down a credit card debt? Check your budget to see if you have extra funds. Are you running behind rent? Your budget can show you areas you can pull payments from to help you meet your rent payment.
New money management habits include fewer travel plans
A lot of your travel plans were put on hold because of the health crisis. The virus swept through the world forcing the whole world to a standstill. It was not only in the US where stay-at-home orders were handed down. Several countries experienced the same thing. Some are even on lockdowns for extended periods of time.
As a result, travel either for business or leisure took a hit during this time. Planes were grounded and boats were anchored in for extended periods of time. It is only recently that you see a lot of people traveling again. But even then, not a lot of people are doing it for leisure. A lot of travel of now is work or business-related.
Also, you might have realized that travel is not that important. Yes, we all need to rest and relax and see new places but we can do that in moderation. There are a lot of alternatives to choose from such as exploring places near you first. It helps you save time and money as well as give back to boosting local tourism in your area.
Getting a side hustle
In an effort to bridge the gap between your income and expenses, you could have taken on some side hustles to make ends meet. Zapier site shared that on average, 1 in 3 Americans have a side gig. This is a great way to help you boost your income during the pandemic. This is actually one of the money management habits you can take with you all the way to retirement. One upside to this is that you get to dictate your hours.
You can choose to work at home for a few hours at night or over the weekend. This is true especially when you have an online side hustle. It also helps when you are able to find a way to use make the most of your hobby and turn it into an income-positive venture. The beauty of this is that you get to do something you love all while earning income as well.
Understanding the importance of an emergency fund
Money management habits that you could have developed during the pandemic is saving money specifically for your emergency fund. In an instant, your reserve fund became one of the most single important funds to help you make ends meet. This is something you can carry over when things start to get back to normal.
You need to make sure that you put in an effort to save up and strengthen your emergency fund. No one really knows what will happen in the future. It could be another pandemic, recession, or something else that could disrupt your finances. Having a strong emergency fund can give you the chance to weather challenges that come your way.
There are a lot of money management habits that you could have formed during this health crisis that will do you good down the road. You do not have to ditch them as soon as things start to pick up. Some of them can help you improve your finances. They can even give you the chance to prepare better for emergencies in the future.