The global health concern that spurred devastating and immediate impacts for business, government, employment, and everyday life has left many wondering, “What can I do or learn as a result of the outbreak?” In truth, it has left families wishing they had been more prepared financially and in case of emergency to handle the unexpected crisis.
Although each person, each family, and each home has seen different consequences as a result of the pandemic, there are sill lessons to be learned for emergency preparedness and financial wellness that make thinking about COVID-19 productive and helpful. How you will implement and mind the changes you can make to your life and household is up to you, but we hope to offer some useful advice.
In this article, we offer some effective and practical tips that you can derive from this crisis that will help you prepare for the next unexpected global concern and, hopefully, to protect yourself and your loved ones from experiencing sudden hardship in the future. Having a plan and learning the lesson COVID-19 presents will go a long way toward making yourself ready for mundane as well as extraordinary circumstances.
Use these lessons as a starting place for your own thoughts on how to recover from and prepare for a pandemic. Your own particular situation and experience will lend itself to this discussion, and it can help you learn heartfelt truths about life, finances, and health at this critical time. Whether you want to get back to normal or adjust to the new normal, this post can help.
(1) Perform a Financial Overview
Perhaps one of the most obvious, important, and critical elements of this crisis has been the widespread financial panic and instability it has caused. At this point in the pandemic, it makes sense to analyze and sit back to observe your own habits when it comes to spending—both essential and nonessential. You must decide everyday how to use your resources, and the pandemic has added much pressure to that ongoing calculation.
Crucial, but not simple, is the need for a spending audit. You might look at your ratios of spending to saving to determine if there is a reason to alter your habits to serve preparedness for the next global or even personal emergency. In this analysis, you will want to consider how much you spend on essential goods and services like childcare, food, utilities, rent, and insurance, for example.
And, through conducting this audit, you will also see what percentage you are saving every month to protect your lifestyle and wellness from interruption by an unexpected event or bill. See the actual spending in terms of necessity, and you will discover that there are places you can reallocate resources in order to ward off negative impacts from natural disasters, states of emergency, recession, and more.
(2) Identify Your Financial Strengths
For most people, it is true that the pandemic has affected their income and spending in a way that will change their outlook and habits forever—not just temporarily—even as we see businesses and companies reopening their doors in light of fewer restrictions. Still, there is a need to identify not just your spending but also your financial strengths through an income audit.
But, what is an income audit and how can you learn from conducting one during the pandemic? Mainly, it consists of finding your income sources and determining at what level they are affected by risk. Many people assign a letter grade for an income sources robustness and its likelihood of being protected from outside, uncontrollable influences.
For example, you might analyze your stocks, bonds, property, and severances in order to see which sources of income are most likely to be affected by income decline in the wake of unforeseen circumstances and events. The income sources that bring you the greatest return with the least amount of volatility and risk will receive the highest grade, and you can then change your donations and investments in these sources for greater, future financial strength.
Once you have completed your audit listing out which sources of income are strongest at the given time, then you can start to consider what the chances are that your income will fluctuate and change during crisis. This insight and lesson is valuable if you want to foresee the potential for decline and the degree to which it might affect you.
(3) Make a Plan for Boosting Your Income
After you have reviewed your spending and strengths, the next step in your learning from COVID-19 is to analyze where you might have additional opportunities to earn, invest, and save. In the previous steps, we focused on what you can learn from the past, but the pandemic also presents the opportunity to consider what could become in the future.
If, for example, you have a goal of taking on a side job, starting a gig role, or even revamping your business, you should consider in what places your energies and efforts will be most fruitful. There might be reason for you to try buying a new rental property, buy more in dividends, or even start a website that can earn you passive income. That’s just the surface. Think about all the ways people make a living and secure wealth, and you will find no shortage of possible roads you can take to greater financial wellness.
(4) Maintain Your Learning and Focus
Most people would call the pandemic completely unexpected, sudden, and even unprecedented, but don’t let these words or ideas get you thinking that when this is all over there won’t be another crisis to survive. If you want to thrive, you will need to maintain an attitude of constant learning and a relentless focus on watching your spending, identifying your strengths, and planning new ways of making an income.
ISU Credit Union is always available and helpful when it comes to meeting your financial goals whether that earning, saving, or investing. You can try our services for the first time or expand your engagement with our many product offerings. Check out our checking, savings, and loan options to get started.