Halfway into 2020 and five months living with the challenges of the current pandemic, concerns over financial health are high for many.
Worldwide, Corona has merely served to highlight so many of our financial vulnerabilities and make us analyse our behaviours when it comes to saving and spending.
As the UK starts to lift gently out of lockdown and non-essential businesses open and trade, we have the time to consider and evaluate not only our pre-corona financial habits- but also to look at how we can keep good habits we may have developed in the last 5 months.
The last few months have likely created new and possibly better habits (e.g. saving money when going out wasn’t an option) and enlightened knowledge of how unprecedented circumstances can be impacted by your financial health.
These new behaviours are particularly important as they can reduce future financial vulnerability.
Focus on your emergency fund
Worldwide, millions have lost their livelihoods due to the pandemic - with many struggling to pay bills, now more than ever you can see why having an emergency fund is critical. We covered this in an earlier blog with top tips on how to get started and save into an emergency fund HERE.
Buying Only What You Need
Spending habits have changed significantly since March 2020 - focusing on purchasing only essential items and conserving cash. In most categories, discretionary spending has declined dramatically. So now is a great time to ask yourself what expenses you could continue to forgo permanently.
Look at Your Budget
With more time at home and several months behind us of essential goods only policies, it’s a good time to review your budget. Comparisons of essential and non-essential spending can show where a significant decline in spending has reduced and could, going forward, be transferred into a savings account (e.g. takeaways, smoking, window shopping, gym membership, etc)
Financial Literacy
Are you now more aware of your finances? Regardless of a pandemic, this is always a good habit to maintain, and if COVID has forced you to monitor, be it from intrigue or necessity, it’s the best habit you can keep. Whether it’s due to intrigue over how your spending has changed or out of concern to meet financial obligations, closely monitoring your finances is a great habit to maintain. US Studies* show people who monitor their accounts at least twice weekly are more likely to stay on track with spending and saving goals.
Life may never be the same again, and it has been a huge adjustment and learning experience for us all. Take advantage of any good habits you have recently developed and be committed to continuing them after this pandemic has passed.