Article by: Mila Bera
Everyone’s aware of the health dangers COVID-19 poses. After all, it’s exactly this pandemic that caused half of the world to stay indoors during the months of March and April.
Yet, not a whole many people took the situation seriously, especially when it came to their personal finances. The crisis has definitely taken its toll on the world economy, and a lot of companies will lose a substantial amount of their revenue in the following months. And who’ll feel the effects of this recession the most? Workers and employees.
Denial is merely the first step to acceptance; everyone needs to go through with it to realize that things will just go from bad to worse (in the coming months) and that they need to get a hold of their personal finances.
In fact, with a proper plan in place, you’ll get out of the ensuing financial crisis largely intact and unscathed (financially speaking).
Make Personal Finance Resolutions for 2020
For better or for worse, the current lockdown has resulted in us saving tons of money already that we would’ve otherwise wasted on fancy restaurants, malls, beauty salons, and so on… You get the idea. Moreover, supertankers all over the world can’t deploy as crude oil storages are packed full and no one’s buying it.
Still, where there’s a will there’s a way; in other words, people will always spend their money — one way or another. However, seeing how a new recession is all but imminent, creating a sound financial plan, and sticking to it, might be the best thing you could do at the present moment.
In short, create a financial resolution to control both your savings as well as your spendings.
For example, vow to save up at least a thousand dollars by the year’s end, make a budget and stick to it, pay off one extra payment on your mortgage or credit, etc. By doing that you can rest assured that you’ll be financially secure in the months (and even years) to follow, allowing you to sleep soundly at night.
Let’s explore this in greater detail below:
Limit Non-Essential Spending
Let’s face it, nobody likes staying at home all day every day. Yet, going shopping or splurging on fast food is not the best way of combating isolation-induced stress. What’s more, fatty foods, candy, and similar products are not just bad for your health, but for your wallet as well.
Hence, limit the amount you spend on junk food and buy only the essential groceries that you need each day.
In addition, a lot of businesses are now offering various sales to cover the gap in their cash registers. Yet, despite these items being 20%+ off, you still need to think about whether you really need them or not.
Stop Wasting Time on Social Media
This may come as a surprise to some, but spending time on social media actually costs you money. According to recent personal finance statistics, 57% of millennials are spending more than they had planned because they were inspired by someone or something on social networks.
Influencers and promotional material on social media can be incredibly persuasive that hardly anyone can avoid their grasp. Since ecommerce makes online buying a bit too convenient, it’s best to just spend less time on social media if you want to keep your wallet in check.
Avoid Getting Into More Debt
Staying clear of debts while there’s a recession on the way is a no-brainer really. Companies are doing everything they can to stay in the green, and if that means massive layoffs, then that’s what’s going to happen.
The thing is, nobody is safe at the moment (even those who have not received any pay cuts thus far). Likewise, the recession will surely limit the job market, thus landing a new job won’t be easy. Consequently, you might have to leech off of your savings account for a few months — hence why you want to stay debt-free as much as humanly possible.
You want to stay in control of your personal finances, and for that, you need to be aware of the dangers of personal finance. No one can predict the future, so being cautious about it is the smartest thing to do at the present moment.
So, cut your spending, make a budget, and avoid being indebted (if you can). Stick to your new 2020 resolution until the world overcomes the crisis.