Have you been hearing people say, “we’re all in the same boat”, during the pandemic?
I have to honest that I’m beginning to find it annoying because it simply isn’t true.
How severely the sudden lack of income has affected you can be mostly attributed to your pre-virus financial position, and let’s face it, most of us weren’t ready, we didn’t plan for that rainy day, make that a Monsoon!
Now we find ourselves in an unthinkable financial position, any savings drained, no regular income, bills accumulating, debts building, terribly stressful times indeed. However, odds are we will make it to the other side, but what we look like when we get there is mostly down to us.
We can be taking steps to decrease the impact and improve the outcome. The following tips are all actions I’ve personally taken, and I can tell you that they are helping me through, and I know they can help you too.
1. Don’t despair, research Your Options
Seeking financial help by those affected by the Covid-19 crises has become a global economic problem, unlike anything witnessed before. But it can be challenging to know where to find help if you don’t know what assistance you need.
Make a list of your most urgent financial shortfalls, then contact the relevant institutions directly. These could be your landlord, mortgage lender, loan providers, and utility companies. No one’s unaware of what’s going on, and most companies are making allowances for it.
If needed, ask for a temporary freeze on monthly repayments and discuss implementing an agreeable repayment plan that will start once you’re earning again. Many people I know have managed to arrange a three-month freeze, do the same as this will elevate the immediate pressure on you, and enable you to think clearly and plan your way through the crises.
2. Maintain Your Credit rating
It’s crucial to ensure that you’re not crippled financially after the pandemic due to a bad credit rating.
Governments and lending institutions have responded favorably during the Covid-19 pandemic, many temporarily changing their lending policies, but these changes can have an impact on your credit score. Lenders haven’t applied a one cure fits all strategy, and often make decisions on a case by case basis. Contact them and make sure they fully understand your situation to avoid any future problems.
Also, educate yourself on the five factors that impact your credit score and then implement what’s needed to maintain your financial health.
3. A good time to re-evaluate your budget
Necessity’s the mother of all inventions, and during times like these we soon realize where we are possibly wasting our money.
Most of us have a household budget, and it usually includes monthly utility bills, medical insurance, mortgage/car repayments, education, food, and extra activity expenses.
Now that every dollar has suddenly grown in importance, it’s time to re-evaluate, trim the fat, and cut unnecessary costs.
- Start by making a quick budget list and assessing what’s essential and what isn’t, and you will quickly see where you can save those much-needed funds. Then cut all non-essential expenditures like gym memberships, club subscriptions, unneeded paid software applications, etc.
- Now you might have a small amount at the end of the month that you could use to pay off high-interest loans, or it might help you from slipping further into debt. Perhaps it could even be used to start building that emergency fund we didn’t have when this all started.
Let’s look at that next.
4. Think ahead and create an Emergency Budget
Right now, an emergency budget might seem like an improbable concept. But the sooner you start one, the sooner you’ll gain a little bit of security back and be prepared for any unforeseen emergencies that might lay ahead!
A proven approach is to apply the 50/30/20 budgeting rule. It can help guide you in starting your emergency fund, and you can use it in conjunction with your household budget list to maintain a positive bank balance and credit rating.
5. Increase your income by working from home
Budgeting is one thing, but what if you still can’t balance the books!
As a lot of us have just learned, a single income source is not always a reliable way of ensuring your financial security; perhaps it’s time to spread your bets. If you want a job that won’t be affected by a pandemic such as this one in the future, assess your skills, add to them where needed, and look at increasing your income by working online.
There’s a growing demand for part-time and one-off gigs online, and people are monetizing their expertise by advertising themselves on platforms such as Fiverr and Upwork. Now might be the time for you to take that leap that you always said you would and start a new vocation. Take a look at what people are offering on these websites; you might be surprised to find that you either have a skill or want to get one that’s in high demand and pandemic proof!
As the great man Nelson Mandela once said: “Do not judge me by my successes, judge me by how many times I fell down and got back up again.” And while all of our situations are different, we have all fallen in some way. Now’s the time to reassess and regroup, and by implementing steps like the ones in this article, you might just come out the other side of the pandemic a happier, wiser, and more resilient person.
It’s entirely up to you, good luck!