Tips for Creating Financial Security for Yourself Post-Coronavirus

Although many of us have made it through the coronavirus pandemic unscathed by the economic downturn, some of us have not been as lucky. Some were furloughed, some experienced significant salary cuts, and some lost their jobs completely. It is important now more than ever to be hyper-conscious of your finances, and there are tried-and-true measures that you can take to make yourself more comfortable now and in the future. 

Budget, budget, budget. 

It sounds simple, yet there are still far too many people in the working world who are not doing it. Everyone from Bill Gates to teenagers working hourly jobs should be budgeting. In straightforward terms, budgeting is recognizing how much money you have coming in each week/month/year and working out how much you can comfortably spend on bills and other essentials. 

As a rule of thumb, your budgeting goal should always be to make sure that your outgoings do not exceed your incomings. In other words, do not spend more money than you make. And, allocate that money as efficiently as you can. If your income was reduced as a result of the pandemic, your spending should reflect that. For example, since restaurants are closed for dining in, save money in your “eating out” portion of your budget by cooking at home. Another easy way to cut back is to eliminate subscription services or memberships that you no longer need. 

Get that debt paid off, and then forget about it. 

If you were among the lucky portion of the population that were not negatively impacted financially by the economic downturn, you are likely not spending as much as you usually would with many businesses closed or minimally operating (i.e. seeing movies in the theater, eating at restaurants, grabbing drinks out, etc.). If this is the case for you, it would be wise to make a major dent in paying back any debt that you have while the opportunity is here. 

A pro tip for starting to do so is to begin chipping away at the source of debt with the highest interest rate first. Obviously, you should continue to keep up with the minimum monthly credit card payments, at the very least, along with any fixed loan repayments. Beyond those, it is great to do your best to work towards being as debt-free as possible and lift that cloud over your head. 

Get yourself the best deal, and don’t get lazy on doing the research. 

We all have household expenses, and these expenses depend largely on factors unique to you. An easy way to make sure that you are not spending more than you have to during this time and in the future is to take advantage of the best deal available to you when it comes to energy bills, car insurance, home insurance, and mobility. Although this may seem like a lot of research, there are websites such as comparethemarket.com, gocompare.com, and moneysupermarket.com that provide the comparisons for you. Make it easy on yourself and visit these sites to see if you can potentially get a better deal on the bills that you already have (and can’t get rid of). 

You may find yourself surprised by all the different ways you can save money if you do a little comparison, and the savings add up over time. 

Prepare for the worst and hope for the best. 

If you have the ability to build yourself an emergency fund, do it. An emergency fund is a recession-proof way to bolster your finances. Make sure that if you decide to do this, the best approach is to ensure that this fund is easily accessible for when it is needed in an emergency (i.e. an easy access cash account). 

You will be incredibly grateful for this fund to fall back on in the instance of a job loss, income cut, or an unexpected cost (think: medical emergencies, a broken refrigerator, etc.). If you can, try to build up to 6 months’ worth of necessary outgoings, such as rent, bills, and other essentials. 

Protect your people. 

If you have a family, it is important to ensure that your loved ones will be okay if something were to happen to you or your ability to make an income. As morbid as the topic may feel, it is foolish to avoid it out of discomfort. 

Life insurance and/or critical illness cover will pay out a lump sum to your dependants to assist them with paying bills and other costs if you pass away or are diagnosed with a serious illness within the terms of the policy. 

It is also imperative that you update your will to reflect your wishes, because if you don’t, your assets will be distributed in accordance with the rules that are in place. 

Above all else, it is important to accurately recognize the financial situation you are in and always work towards improving it. If you are not taking steps forward for yourself financially, you are taking steps backward.