The Covid-19 pandemic has changed everyone’s lives immensely since 2o20. It has disrupted how we work, travel, shop and spend. All aspects of our lives to be precise. Many countries around the world were or are under lockdown to curb the spread of Covid-19. Besides the loss of human life around the world, the social and economic disruption is devastating. We have lost much of our freedom like meeting up with friends and loved ones, children going to school and even breathing freely. Borders are closed and many businesses related to travel and tourism have been brought to their knees.
Although lockdown has eased here in Malaysia, we are still seeing businesses closing down. Many shops/offices have huge To Rent or Sell signboards plastered everywhere. Even the neighbourhood restaurants that were thriving before the pandemic have shut their doors.
Although I am still considered a little luckier compared to many folks because I still have a job and hubs is still running his online business, many people I know are affected. A friend who runs a tour and travel company for over 20 years have to close her business. She is now selling meat online. My Zumba buddy who works as an air stewardess has not been flying for over a year. She is now out of work and has been trying to find new employment. My sister and her husband who have been operating a boutique hotel for over 3 years are hit hard due to the closure of borders between interstate. They have cut costs and reduce the workforce at this almost-zero income period and the reserves are depleting.
Many people especially younger adults between the age of 28 to 38. round the world have been hugely impacted by challenges brought on by the coronavirus. They may not have built up emergency funds quite yet or who may be trying to navigate their first real financial challenges. The pandemic is going to continue to impact everyone’s personal finances and eventhough I still have a job, I believe that we can all take some simple steps to build financial security for ourselves and our families.
It is important that we keep aside some money every month for emergencies. An emergency fund is important to help us weather the economic storm. Financial experts have recommended that we should save between three to six months’ worth of expenses in cash and some even suggested keeping a year’s worth of expenses in the fund due to the uncertainties caused by the Covid-19 pandemic. This fund allows us to live for a few months if we lose our jobs or if something unexpected comes up that requires a huge amount of money to cover like a medical emergency or a crisis. Some people are comfortable with saving more while some with less. The main intention is to have enough to support us in worst-case scenarios, like temporarily losing your income.
image via Google
We should also manage our spending responsibly and be careful with our spending such as shopping online and reducing subscriptions to online entertainment that is hardly used. Essential expenses are the top priority. I am also reevaluating my budget to find ways to save money for rainy days. I discovered this nifty online calculator that can help me to plan my budget. Before I would just buy whatever that caught my eye and I tend to overspend and buy things that I do not need. Now, I allocate $200 a month for clothes, shoes, or bags because shopping makes me happy, especially in times of uncertainty. With a budget, I can see where my money goes every month and where I can save the extras for investment.
Another good thing to consider is to reduce our debts such as credit cards with high interest. Try to find out how long it takes to pay off the credit card balance and look for cards that would help save money using the credit card payment calculator. It may be time to also take a look at refinancing any loans that we have with one that offer a lower interest rate.
Taking control of our expenses can give us peace of mind to ride out the Covid-19 economic storm.
