How to Manage Your Finances in Uncertain Times

2020 is a year that will probably be remembered for the few occasions that made us feel like we’re living in a rather uncertain time. The most influential issue of course, was the coronavirus pandemic which crashed the global market and set it on a path for long recovery. While there are many articles about predicting changes in stock markets, you can never be certain when the next enormous drop will occur. But what you can do is prepare yourself to ensure that your livelihood will not suffer too much from such an occurrence. So many people lost their jobs because of this pandemic and it makes you wonder, what would you have done if suddenly you found yourself with no income in a trying time?

Emergency Fund

If you don’t know what an emergency fund is, then you are in dire need of one. An emergency fund is basically the money that you are putting aside to use in case of an emergency, quite obviously. But don’t beat yourself up if you haven’t done it by now. That won’t change anything. Instead, review ways you can save some money from each paycheck and take into account your monthly expenses in this time when most people are only buying the essentials. Chances are this should be the floor of your emergency fund budget, because if another crisis comes around, you’ll probably need the same kind of essential items, so make sure you can cover at least two or three months.

Investment Opportunities

A market crash is a really big pain for everybody who had notable investments in stocks, but it is also a very very sweet opportunity if you’ve been wondering how to invest in stocks over the past period. If you’ve done even the slightest bit of research into stocks investment then you understand that the ideal scenario is buying when the stock value is low and then selling once it comes up. Well, now is the right time for that seeing as stocks are at a record low. However, as uncertain times like these have recently shown us, there is no guarantee that the stocks won’t continue devaluing over the upcoming period. In the long run, stocks are always going to rise otherwise it would mean that the world industry has come to a halt. Right now, it partially has come to a halt but businesses are slowly starting to open up around the world and this trend is going to continue. This is a great indicator that stocks are going to be going up in the near future so right now is the perfect time, if not even too late, to get on that train. Of course, do not make the mistake of investing more than you can afford, and especially do not make the mistake of investing a cent from your emergency fund.

Reduce Expenses

Having the deluxe Netflix and HBO packages are great perks of living in our age but you have to stop and think for a second, is that the most important thing I need to spend money on in an economic crisis? Probably not. Of course, this does not mean that you need to disconnect everything and spend your days in darkness. The idea is to reduce spending by making a series of smart decisions that won’t make a huge impact on your day-to-day life. For example, choose a cheaper package and only subscribe to one streaming service. As soon as the situation starts looking better, you can go back to both, if you feel like you need to. Identify the things that you rarely use or can go without for a short period of time and you will be able to cut down a considerable amount of recurring costs that could pitch in to your emergency fund.

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