Millions of people around the world have been affected by the coronavirus outbreak, and even many more are suffering indirectly as a result of the outbreak. Apart from the health effects of the virus which is the most pressing concern to everyone, people are also worried about their finances. Many people have been laid off from work and so many others have been told to stay at home. So, without any money coming in for the next few months, how exactly are you going to keep things stable? How do you manage your finances during the coronavirus outbreak?
A survey carried out by FinanceBuzz showed that 68% of Americans are worried about how they will pay their bills, 80% are scared of facing unexpected costs during this period, and 63% are scared of contracting the virus and falling sick. From this survey, you can see that money issues are more pressing on the mind of many people.
In this article, we’ll be showing you how to manage your finances during the coronavirus outbreak. So, don’t fret. You will be able to take care of yourself during and after the outbreak.
Ways to Manage Your Finances During the Outbreak
Go back to your budget
Going back to your monthly budget sheet is important. It is one of the best ways to manage your finances during the coronavirus outbreak. A few weeks have passed since the outbreak got worse and everyone has to sit at home, but you can still make changes that will affect you positively at the end of the day.
If you have been using our budget spreadsheet template, you would have a detailed breakdown of all your expenses. In this period, the best way to save money for future purposes is to cut costs. Your budget sheet will show you how you spend your money.
If you are not using a detailed budget sheet, you can still work with what you have. Calculate all your current expenses and divide them into categories. Then, you can remove every non-essentials on your list. There are things you can do away with during this period. If you discover that you still have money going into entertainment (like dinner, movies, fun at the park, traveling), or a gym membership, stop them for now.
Since you will be at home most of the time, you should save your cash for things you will really need. After cutting off all your unnecessary expenses, try to best to keep your spending at a minimum. You can still save money on the little you have left. For instance, most people shop for groceries at once. Before you go shopping, make a list of all the things you have to buy, and try not to purchase so many perishables that will get spoilt in a few days, and you will have to throw away in a few days.
Also, this is a period when you should make good use of all those coupons and discounts you have been piling up. No one knows when this outbreak will really end, so you have to save all the money you can.
If you’ve never used a budgeting sheet or just spend as you receive, you should read our beginner’s guide to budgeting and also get our budgeting template.
Don’t exhaust your emergency fund
As said earlier, no one knows when we will go back to business. In America, cases are still rising, and everything is still uncertain. Other parts of the world are also experiencing the economic effects of the outbreak. There is a good chance that the economy will go into a recession. So, how do you survive that if all you do during this period is spend all you have in your emergency fund.
Of course, it is an emergency, but is the wise thing to do making yourself go broke? No.
This is a period where you should try as much as possible to strengthen your emergency fund. I know it sounds difficult. But if you make the right choices and do the right things, your emergency fund will go up, not down.
Firstly, cut down your expenses. This point can never be overemphasized. You should do away with everything that does not matter.
Then, if you have any unsettled bills, pay them up, so you don’t let them pile up. Now that you’re free of debt and have settled your bills, you can focus on growing the money in your emergency fund.
If you have any cash left after paying the bills, you should put in a high-yield savings account. In a high-yield savings account, you will get more interest on whatever you’ve put in than you would in a normal savings account. So, you would be having more money in a shorter time.
Another valid way is to take another job, a side gig you can do at home. Because your boss at work says you cannot come anymore and the outbreak has left you without income doesn’t mean you should leave it that way. You have skills, and there are many people out there that still require your skills to keep their businesses going during the outbreak. Whether you’ve tried your hands on writing, editing, drawing, or proofreading before, there is a job for you out there that will keep your emergency fund growing.
Also, you can try getting some small extra bucks by reviewing apps or websites and taking surveys online. You may decide to use the money gotten to take care of yourself at home while you don’t touch your emergency fund.
Some people will roll their eyes hard at investment right now because the outcome of this outbreak on the economy is uncertain. But, this is not the first time the economy will take a hit. What you should know is that it always comes back up. If you’ve not been investing before, or you know you’re not up for it, you can skip this step. Investing is not for the faint-hearted.
The major things you should do when investing in this period is to start small, go gradual and then diversify. Don’t put all your money in one place without a plan.
Note that the money you’ve put in the stock market stays there for a long time. There shouldn’t be plans to get that money out in a long time. So, you can keep three to six months’ salary in cash that you can go to when you need to get something. Remember that you shouldn’t be taking from your emergency fund either.
Having an investing plan and sticking to it is also very important. When you stick to the plan, you can even earn interest on the interest you receive. You should consider investing a fixed sum into the same investment period regularly for a long time. When you do this, you’ll be able to buy more units when the cost is low and fewer units at a high price.
To ensure that you are exposed to a broad range of stocks, you should also consider ETFs (exchange-traded funds) or low-cost, passively-managed index funds.
Reach out to other organizations for help
If you have cut your budget and still don’t have enough to pay your bills completely, you should ask for help in order to handle them. There are various organizations that are more than willing to help people who are going through hardship this period, so you shouldn’t be scared of going to them. There are many creditors who will help you ease your financial burden.
The Department of Housing and Urban Development in the United States recently announced that all evictions and foreclosures in the next 60 days will be suspended. So, you shouldn’t worry about being thrown out of your house right now, but to establish a payment plan after the outbreak, working with these creditors is a good step.
Reasons you could meet these creditors also include credit card debt, utilities, and loan repayment problems. So, don’t sit and look.
Living a comfortable life during and after this period is very important. So, you should not only be thinking about right now but also what happens right after this is over. Since you know how to manage your finances during the coronavirus outbreak, you can do the right things to keep you financially stable.
No one knows how long it will take or the intensity of the impact the pandemic will have. All you need to do is try to keep calm always, maintain a clear head, and make strategic and very wise financial decisions. Also, have it in mind that any mistake you make right now may affect you for many months to come. So, stay sharp, prepared, and ready for any obstacles that come your way.