If the global pandemic has left you feeling a little on edge over your finances, you are not alone.
Many around the world are spending more time reassessing their financial wellbeing since the pandemic crept in, according to Schroders Global Investor Study 2021. This was most prominent in Asia – with respondents in Thailand (91%), Indonesia (88%), and India (88%) sharing this view strongly.
Clearly, the pandemic has been trying, but it has highlighted the importance of being prepared.
Here are three ways to be financially ready when the next one surfaces.
Reassess your financial posture
If you have not done so already, the new year is an excellent time to establish your financial posture. Determine what you owe and own, how much you spend each month, and how much is enough to cover your basic expenses.
Set a goal on what you need to be financially comfortable and build a budget around it. List your monthly expenses, including mortgage, insurance premiums, utilities, and childcare. Then, figure out what are essential and non-essential items, so you can aim to curb your spending on those that are not a priority. Do you really need subscriptions to both Netflix and a paid TV service?
Remember that your budget should be recession-ready, so it can still pull you through if you experience a loss in income.
Make allowance for unexpected expenditure, too. You never know when a broken refrigerator needs replacing or a cavity has to be filled.
You can also read articles and blog posts for tips on financial planning and wealth management.
Declutter your life. It is not just your closet that needs a Marie Kondo. Strive to consume only what you need and to live less excessively. Want less, spend less.
Track your expenses
Once you have a targeted budget in mind, you will need to ensure you can stick to the plan.
Many digital tools available today can help you track and manage your daily and monthly expenses. These include Seedly, Zenmoney, Monny, and Expensify.
Tweak your spending habits when you find yourself busting your budget each month. There is no point in diligently tracking your expenses if you are doing little to ensure you keep to the targeted budget.
Pump up your emergency savings
If there is one thing the global pandemic has taught the world, it is that the unexpected can happen with a snap of a finger.
This is where an emergency fund is critical, especially if you are in an industry that can be severely impacted by a pandemic. Most financial advisors recommend a backup pool of funds that can cover your living expenses for three to six months.
If your regular income falls a little short, you can turn to side hustles to bump it up so you can park more into your savings. Selling craftworks online or starting a food blog can turn out to be a lucrative venture for some. You can also try your hand in trading.
If you are new to the trading world, there are platforms such as Forex4you to help you get started. It offers a range of functions, including basic trading processes such as opening and closing positions and creating orders. You can also personalize charts and tag your favorite stocks.
Forex4you supports more than 150 trading options including currencies, stocks, commodities, and cryptocurrencies.
The financial markets are unpredictable, and returns are never guaranteed. Understand the risks and only put in money that you do not need in the long-term, so you can afford to hold until your shares can rake in profits.