COVID-19 shook the entire world. From health to finances, it has affected our lives in multiple ways. As we entered the third year of the pandemic, another Coronavirus variant, Omicron, can take many people back from where they started. And with the third wave, uncertainty has come knocking at doors again. While all of us are worried about our health, many are under tremendous financial stress. It is difficult for many to manage their finances and easy to fall into the debt trap due to it.
So, here are a few tips on how you can manage your finances during the third wave of COVID:
The emergency fund is for emergencies
The emergency fund is a financial cushion to help you get through financial hardship or emergencies. Ideally, you should save for expenditure of at least six months in your emergency fund. During the first wave, many people were laid off or faced pay cuts which pushed them to take money out of their emergency fund. While some had the means to sustain themselves with their emergency fund, some fell into the debt trap due to their previous financial decision. The first wave made many people realize that financial management is necessary. With the increasing number of Omicron cases, people are again scared of the economic impact on their lives. So, access your emergency fund only if necessary, and you have no other means to sustain yourself.
Get health insurance
Lack of awareness about healthcare plans and insurance has also impacted many people during the first wave of COVID. A healthcare insurance plan is the need of the hour. Many people still struggle to understand the importance of medical insurance. It helps you stay afloat during medical emergencies and keep you safe from unexpected high medical expenses. The earlier you get insured, the more you will save and become safer.
Easy access to credit lines has made our life easy, but as a generation with many distractions, we end up spending more on our WANTS than our NEEDS. Instead of rationally making financial decisions, many of us focus more on our Wants and end up accruing credit card debt or personal loan debt. It is essential to reduce your debts to become financially sound. Make a strategy to reduce your debt. There are many ways available to eliminate your debt yourself strategically. But if you are going through a financial hardship, you can look for options like debt consolidation and debt settlement.
Crypto and stocks are all the rage nowadays. Though investing in the right kind of stocks and crypto can increase your wealth by multiple folds, you can end up in loss if things go south. During this pandemic wave, be sure that you have enough to go by in case of any emergency and you manage your finances in an orderly manner to meet your needs first.. When investing in stocks and crypto, be mindful that it can go both ways. So, make sure that you invest after excluding all your necessary monthly expenditures to build your wealth; in other words, it should be disposable income.
Briefly, managing your finances and planning can comfortably help you get through this wave. Most of your expenses are in your hand, so you can juggle and see where you can reduce your costs. You may not have control over your circumstances, but better money management can help you get through times of hardship. So, make changes to your lifestyle as per your condition and liabilities.