The pandemic forces us to face situations in which we have not yet been – many of us began to work remotely, schoolchildren and kindergarten children stay at home, socialization is reduced to a minimum.
All this has an impact on economic processes: several industries are experiencing a significant decline in turnover and are forced to lay off workers. Residents should reckon with declining income if they have to deal with illness, self-employment leave, or job loss. Tensions in the field of personal finances are also natural since there is great uncertainty about how strong the impact of the pandemic will be on the state economy and the financial situation of families.
From the individual’s point of view, financial well-being is important not only in terms of fixing money issues. Research suggests that financial stability is closely related to overall well-being. The stress of financial uncertainty can have a significant impact on productivity and affect the entire family. Therefore, timely ordering of finances is important and will certainly lead to results.
1. Budget Planning
The present time is definitely meant for planning. If earlier many were sceptical about this and relied on an approximate calculation of expenses and incomes in their minds, now this will not be enough. The fact that children spend all day at home makes this need even more urgent. In order not to run every day to the store, it is necessary to develop a nutrition list and subordinate the list of purchased food products to it.
If parents work remotely in parallel with household chores, doing multiple tasks at the same time is not at all easy. The daily rhythm chart, meal planning, and a thorough revision of income and expenses will help organize it, for which you need to create an accounting system. These can be notes in a notebook, Google Sheets, or one of the smartphone applications.
2. Reassessment of Priorities
It is necessary to structure spending into three categories – obligatory, necessary, and desirable. Obligatory payments (utility bills, loans, other bills) must be made as usual, since failure to pay them threatens with consequences. The necessary ones include those without which you cannot live, but on which you can save. For example, food, clothing, transportation.
You should understand how much per month can be allocated for them, and do it in advance. The easiest way is to save on the desired expenses (goodies, new shoes, entertainment). While the opportunities for such spending have diminished significantly, shopping online can still be tempting.
3. Creation of Savings
The building or replenishing of a safety net is very important. This will help maintain a sense of security and emotional balance and prevent additional stress. It would be enough to ensure survival for no more than one month. If you are in a situation where there is an opportunity to save money with a thorough review of expenses and budget planning, be sure to send the remainder to savings.
It would be also great to find a source of additional income. For example, you can engage in Forex trading. In order to start, visit the Forextime blog, which is really helpful for beginners.
4. Review Fixed Costs and Subscriptions
For example, mobile phone connection and tariffs, monthly TV, and Internet charges. The range of their offers and prices on the market may change over time. Perhaps, while you are working remotely, you can stop paying for the parking lot at the place of work and reconsider other expenses that could lose their relevance with a change in the daily rhythm.
5. Assess the Ability to Handle Recurring Payments
If revenues have decreased and there are legitimate concerns that you will not be able to cope with the previous flow of invoices, be sure to take the initiative and start negotiations with the service provider about deferring payments or scheduling partial payments. For example, banks offer deferral of payment of the principal amount for a certain period. It should be remembered that in this case, you must continue to pay interest.
6. Awareness of Support Options
If the situation is developing unfavourably now – a job is lost or incomes have significantly decreased – by all means, be aware of all the possibilities of social support that you are entitled to. Unemployment benefits, sick leave payments, or local government social support can help alleviate a short-term crisis.
Take advantage of distance learning opportunities and enhance your skills in both financial management and professional life. Digital and audiobooks, online courses, video book reviews on the Internet are just a few examples with which you can wisely restructure your everyday life.