COVID-19 has brought financial stress to many. With the threat of job loss or pay cuts looming over our heads, you need to know how to manage your personal finances during this time. Without that, you may find yourself in financial trouble, adding to the mental stress that the pandemic brought.
Let’s look at 6 tips that will help you manage personal finances during the COVID-19 pandemic.
Re-evaluate Your Budget
Take a look at all your current expenses and eliminate unnecessary ones. Anything that screams luxury or frivolous can be ditched. For example, you do not need new expensive clothes and beauty products. The essentials for which you need to budget for include food, groceries, medicine, and bills.
Save as much as possible and put that in your emergency fund. You need to be prepared for a situation where your income gets affected either by pay cut or a job loss. Apply for a personal credit line if you need cash urgently.
Keep Your Lender in the Loop
If you are concerned about not being able to pay your bills on time, get in touch with your creditors and bank before things get out of hand.
Yes, it could be nerve-wracking to have that conversation with your creditors, but do take that step. Considering the current situation, the pandemic has put the world in; many lenders are working to support their borrowers. They can offer solutions like extending the bill payment date or something else that can work for you.
Apply for a Personal Line of Credit for Emergencies
You never know when an emergency may strike, but you need to be financially prepared for it. One way to do that is by keeping a personal line of credit ready for emergencies. This financial tool allows you to withdraw money from the credit line whenever you want, and you need to pay interest only on the amount that is withdrawn.
Look for lenders who offer lines of credit at nominal interest rates. This could really help you if you find yourself in a financial fix.
Buy Household Items for a Month
This is the time to reduce human contact as much as possible. Go out once a month and buy non-perishable items for the entire month. These include groceries, prescribed medicine, diapers, baby food, pet food, detergent, soaps, etc.
Look for sales or discounts that you can get on large purchases. Moreover, you will save money on fuel when you just make one trip.
Beware of Scams
While the world is reeling under the coronavirus pandemic, scammers are taking advantage of the situation. It isn’t uncommon for people to feel anxious about their finances during these uncertain times. So, if you come across a deal that looks too good to be true, stay away from it.
If you get emails or SMS asking for sensitive information like bank details or asking you to click a link, it is most probably a scam. If it looks like it’s coming from an authentic source, call them to confirm before you do anything.
Reduce Financial Obligations
If you have any outstanding debt, try to restructure it and pay it off in small EMIs for a longer period. By reducing your financial obligations, you will make your financial situation slightly manageable when everything normalizes.
If you want to be in a strong financial position without extra liabilities, you need to be smart about how you handle the finances during the pandemic. The tips mentioned above will help you weather the storm without too much damage.