Pandemic lessons can help you manage your finances better this year.
Yes, with everything that the health crisis has thrown your way in the past year, there are also lessons to be learned. These nuggets of wisdom can prove useful as you try and improve your finances at the start of the year. It could be a difficult task considering what the pandemic could have done to you and your finances last year.
A lot of people lost their jobs. Several companies and businesses had to either scale down operations or shut down entirely due to the health crisis. Even the children are staying at home. They are trying their very best to adjust to a new online education platform. You might be working at home but there were a lot of adjustments with that as well.
In all these, pandemic lessons can be picked up if you keep your eyes open and you choose to look at the things you can learn from it. It will be a difficult task to do but it is something you need to do. There is no doubt that you could have gone through a very challenging financial crisis of your own in the past few months. But you can use that experience to help make you become a little bit wiser.
If you want to take on the year with more control over your finances, then you need to use the lessons that the crisis has taught you. You need to take a look back on your struggles and start from there. What got you into that situation? How did you pivot your way out? What could you have done better? How are people saving more and using their cards less as reported by NBC News? These are some of the hard questions you need to ask yourself.
Pandemic lessons include having an emergency fund
One of the most profound lessons from the recent health crisis is the importance of having extra money. If your income is negatively affected by the health crisis from a lay-off to a furlough or even fewer days at work, your reserve fund will come in handy. Remember that this account might be referred to with a number of names.
It is most commonly referred to as your emergency fund but some people call it differently. It can be referred to as a cushion fund or even a reserve fund. Whatever you call it, this money is meant to cover unexpected disruptions in your household budget. Ideally, you use this for your immediate needs such as for food and other utilities at home.
When saving for your emergency fund, keep in mind where you put the money. It needs to be accessible enough but give you a decent return on the money as well. Think about a high-yield savings account. If you are just starting out, no need to rush. Begin with a small amount and create that habit of saving money. As you move forward, increase the amount so you save more for emergencies.
Stay on top of your expenses
Budgeting is also one of the pandemic lessons you should be looking at. Not a lot of people believe in it but this is one of the most underrated financial tools you will ever need. If you do not have one yet, you don’t have to start with a complicated budgeting process. Simply list down all your income on one side and your expenses and all other payments on the other.
Your goal is to have a higher total on your income side as against your expenses side. Once you do, you will have some funds you can put into your savings account. Regardless of whether it is for your retirement, college fund for the children, or a business start-up fund. The problem starts when your income cannot cover all your payments.
This is where you need to start making adjustments. The most common strategy is to start cutting down on your expenses. You can also begin exploring opportunities to help you increase your income. It can be taking on a second job, looking for passive income, or putting in extra time at work. Keep in mind that you regularly need to monitor and adjust your budget as well as you go along.
Skill upgrade is important
If you struggled to find a new job during the pandemic, a big reason for that is because not a lot of companies are hiring. It does not help also that the BLS shares that the unemployment rate was at 6.7% when 2020 ended. But also, your skills might not match what companies are looking for. This is one of the reasons why skill upgrade is one of the pandemic lessons you need to look into. It can help you cast a wider net when looking for a job.
Never be content with your achievements and always strive to make improvements regardless of how small they may be. You can even pick up and learn a new skill altogether. Age is just a number when you choose to learn something new. When you do, it could also be a chance to help you earn more through income-positive hobbies.
It would feel great to earn money while doing something you love. This also gives you the chance to improve your skill the more you spend time on it. One other benefit this has is it gives you options in the future. Even in retirement, these hobbies can fit right in. You do something you already love doing and you get some extra cash from it.
Wider professional network
Another one of the pandemic lessons you should learn is to be casual and try to take the high road when you are leaving your company. For one, this helps you keep that door of re-employment open once the economy bounces back and they need more people. More importantly, this can give you the peace of mind you need after leaving your job.
This helps you maintain your professional network as well. You are in a position to cultivate and grow your network. When you do this, you can tap into your network to find job openings in your industry. You might even know about it even before the company advertises the position. This gives you a headstart in your application. To cultivate your network, be sure to pay it forward as well and help other people out as well,
When the health crisis landed in the country, it did not spare anyone. Young and old and people of all races got infected. Now that we were able to slow down the transmission of the virus, you need to say healthy to keep it that way. You might begin to think that this is one expensive decision but it actually starts with simple handwashing.
The pandemic forced everyone into re-learning proper handwashing. There are also minimum health protocols such as wearing face masks when you go out to buy what you need at home. On top of this, you also need to begin taking care of your body. Be more conscious of what you eat and aim for a few minutes of exercise a day as well. If you have pre-existing conditions, be sure to stay on top of them and follow your doctor’s orders on how to manage them better.
There are a number of pandemic lessons you can learn from the past year which you can use at present to strengthen your finances. Just keep an open mind and you will discern these lessons.