These last few months have been one of, if not the hardest times for a lot of people. Not only are there serious health concerns, but there are huge implications for people’s income, jobs, and losing loved ones. It’s a tough time, to say the least.
Chances are, you are either directly affected by the pandemic, or you know someone very close to you that has been. Everyone is dealing with this in one way or another, but amongst all the gloom, there might be a sliver of hope. Social distancing has saved a lot of people, Financially, that is.
Hitting the brakes
So many people were on a disastrous trajectory with their finances. People were spending in record numbers, debt was on an all-time high, and people never imagined how it could all end in disaster.
This pandemic has caused so many millions to hit the brakes and actually take a second to reflect on their finances.
Over the last few months, a lot of people have reflected on their non-essential spending, and cut out a lot of that. Nobody can travel, nobody can shop as freely, and nobody can go into sit-in restaurants. This has caused people to put money aside, shop a lot less, and actually cook meals at home! Talk about hitting the brakes for sure.
Sure, none of this was intentional, and nobody wanted to be restricted in this way. But it’s hard not to recognize what this pandemic has caused people to do, and not to do. It was, financially speaking, a blessing in disguise.
When things are good, nobody thinks about preparing for the worst. Everybody lives like it will be perfect forever, and never have to worry about tomorrow. It’s in our nature to live for today, and worry about tomorrow later. This pandemic was definitely a wake-up call.
For the first time, in a very long time, people are actually worried about waking up tomorrow without a job, without a steady income. This causes people to reflect more on how much they have in their emergency fund, and how to prepare themselves for the worst.
Before the pandemic, 1 in 4 Americans lived paycheck to paycheck, and could not come up with $400 in an emergency. Now, people are forced to step back and prepare themselves for the worst.
So with all these things people are facing, one thing becomes very apparent. A lot of self-reflection is done, especially during scary and uncertain times.
People are taking the time to look back at their spending habits, their debts, and their job security. This self reflection is going to go one of two ways. Some people will learn from their mistakes and change for the better, whereas, others will just return to their old ways once this is all said and done.
Take this opportunity to learn from all the past financial mistakes, and come out of this stronger and smarter than ever.
Things to remember
So there are a few things everyone must remember after all this is over. Social distancing has saved many, but its important to remember some important things. It’s important to take away the financial changes one must put in place so that if a crisis was to ever return, we’re well prepared for it.
1. Start budgeting
The first, and most important thing to remember is to budget your money! Money doesn’t control you, you control it. The moment you spend your money without caring where it comes from, or how much you have left, is when it starts to control you. Make sure you learn how to budget and always know how your expenses and income look in detail
2. Build an emergency fund
Emergencies sound like science fiction until an actual emergency comes! It’s important to always have a nest egg, just in case of emergencies. Things like, I dunno, a global pandemic definitely sounds like an emergency! So make sure you always have an emergency fund, and never stop contributing to it.
3. Avoid using credit cards
This really only applies if you ever carry a credit card balance over a month. If you have a credit card, it’s only use should be to rack up points. If you carry a balance off it, pay it off, and throw it in the back of your drawer for a while. You don’t want to be racking up debt during a time like this.
4. Pay off bills you’re behind on
Thing is, bills are things that will never go away. Unless you become bankrupt, no debt will be forgiven, so it’s in your best interest to make sure you catch up on all your bills and pay them off.
We’re all at a crossroads, and it’s up to each and every one of us to pick a path and walk down it. Social distancing has saved people not only from health concerns but definitely financially as well. This is a wake-up call to many and a reminder to most. Things happen, life happens, and it’s always smart to remain prepared, and not be caught off guard.
This pandemic has been nothing but horrible for every single person, and its times like these that the most growth happens.
Hang in there, and become a better you!
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