Coronavirus brought about a lot of changes to our daily life. Travels halted, malling regulated, social life was never the same, most of all our personal finances have been greatly affected.
The steps being taken to control the COVID19 outbreak is affecting our finances. Yes, you might be saving on your commute but on the other, you might be spending more, stocking up on food and cleaning supplies, paying more for delivery charges, or shipping fees as you transition to online shopping to ensure safety.
Nowadays, lot of people are making less money, worse others are seeing their income dry up completely because businesses and workplaces are shutting down. To help you get through your daily life in this trying time, here are a bit of financial advice and some money management tips.
- Avoid panic buying even if you have money to spend.
A lot of people are nervous right now because of uncertainty and that leads to some panic-buying at the grocery store or the drugstore. While it is a good idea to stock up for self-isolation and there’s nothing wrong with buying more than we’re used to; it does put a strain on a lot of people’s budgets in the short term.
There’s no need to go to the extent that we’ve seen with people over-buying things like alcohol, toilet paper, or canned goods that could last for months. When it comes to food, fresh produce is still the best, as it can help you give your body the nutrients it needs to keep the immune system strong. Canned goods, processed foods, noodles won’t boost the immunity. Remember that immunity is the best armor against any kind of germs and viruses. You just need to apply a sense of reason before you buy more than what you normally do.
- Consider emergency savings funds and priorities.
It’s also important nowadays to have emergency savings funds so we can cover situations such as this pandemic when we see our expenses suddenly shoot up. But what if you haven’t prepared any emergency fund? What can you do when you find out your income suddenly cut off?
In case you lost your source of income, you have to quickly prioritize which bills you’re going to pay monthly. If it’s just not possible to pay all of them or if you can’t make your credit card payment, call your credit card issuer and see if they can give you more time. You may ask them if they can waive interest because of your current situation. Some companies are proactively making those kinds of offers to consumers, you just have to take the first step to call and ask.
Some people do have more than one credit cards. You can’t have them all or use them all if you no longer have a steady income. Now you have to choose one or two to make your finances more manageable.
Unsure which credit card you should retain? This credit card calculator can be used to estimate the long-term costs of multiple credit cards which may have varying annual fees, introductory rates, ongoing rates or compounding intervals.
To figure out which card is a better deal, this calculator will use the fixed payments, so you need to enter your initial account balance and the terms for each card. Try to include your average payment amount to improve the accuracy of the calculation, if you make varying payments.
If a particular card does not have any introductory offer you can leave that field blank.
- Make any specific changes right now.
If you have kids, cut back in areas like kids’ activities so all of that spending that you used to do will be put into savings. Too much uncertainty right now so better make specific budget for needs, wants, savings and debt payments.
You may use the formula 50-30-20 for the budget. Basically, 50% is dedicate to needs like mortgage, utility bills and groceries. Thirty percent is for the debt payments and savings and only 20% for the wants such as restaurant spending, personal care spending, getting haircuts and activities for the kids or for the family.
This pandemic has proven our financial vulnerability especially to the workers who have lost their jobs as a result. What ways are you doing to maintain a responsible financial behavior as you navigate this precarious time in history?