How to Manage your Finances in a Crisis (COVID19)
In a coronavirus pandemic: our lives have been disrupted a little bit, our jobs now are from home, those seeking opportunities put hold on, our finances are not left out. We are in a confused state, hence the panic buying, some say it’s the end of the world. While most believe it’s time to follow through with the ‘You only live once,’ motto.
It’s a period of uncertainty and our economy is on a total disrupt. With the lockdown of schools, churches, airlines, companies, business and shopping centers, life is in jeopardy. In time of a pandemic, panic is a normal human response, hence panic buying.
What’s Panic Buying?
Panic buying is an unexpected surge in demand for large amount of a product in anticipation of a perceived pandemic, shortage or disaster. In this situation, people buy as much food, and any other essentials as they are concerned about all ways the health crisis and the social distancing policy will have an impact. Rather than panic buying, which is a bad financial decision, it’s best you keep calm and follow some of these tips:
Create a Budget:
The first thing to consider is creating a crisis budget. This is a time to be strategic about your finances. On the budget, highlight your essentials and non-essentials. Know how much you need to survive in three months, and what to cut back on. Review your subscriptions; magazines, Netflix, gym memberships, streaming services. Monitor your online shopping urge, and retail for the things you need most in the time of a crisis. You can use budgeting software like Mint.com, Pocket Guard, or Level Money to help you plan and track your expenses.
To practice social distancing and manage your finances during this pandemic, you will need to stock up on food stuff and provisions. Get affordable and long-lasting meals. Buy food that are in season and easy to find. Store more of beans and grains. Also, canned foods last longer and can help you avoid wastage. Buy fruits, nuts and vegetables, these can help boost your immune system. Alternatively, you can have dried fruits, and substitute them in your meals.
Set Up three months or more Emergency Fund:
It’s ideal to set up an emergency fund, no matter how adequate your savings are. For now, we can’t predict how long the lockdown is going to last, so you might need to cover expenses in event of an emergency or loss of income. In creating an emergency fund, consider your personal level of comfort (you don’t have to tune down your lifestyle largely but it is to be considered), and availability of other sources of income. Open a separate emergency account different from your savings account, using Cowrywise or PiggyVest, you can set up automatic savings.