How to keep an eye on finances during COVID-19




The recent worldwide stock market rout is no more news. COVID-19 has created a global negative sentiment, with all the major stock markets taking a hit; let it be Dow Jones, Toronto Stock Exchange, Nikkei, Sensex, or London Stock Exchange. A UN report predicts a global loss of over 195 million jobsbecause of the ongoing crisis. Another report puts the loss of labour incomebetween $860 billion and $3.4 trillion.

The good news is that all major economies have put together relief packages for their affected population, with the US announcing a relief package exceeding $2 trillion.The Canadian government is providing wage support of up to 75%of a worker’s salary.

As an individual, you’re going to face the impact of COVID-19 one way or another, and we’re not trying to scare you but merely putting together a clear picture. Streamlining your finances to fight against this setback is a step in the right direction. Here are some tips to prepare your finances against the current financial uncertainties.


It’s time to rejig your budget

If you had a budget before COVID-19, it’s time to rearrange it for any future financial challenges, and in case you didn’t have one, this is the best time to get started.

The concept is simple.
  • ●  Take into account your income from different sources.
  • ●  Create a list of all of your expenses
  • ●  Divide your expenses into essential and discretionary categories.
  • ●  Streamline your budget to eliminate or cut on your discretionary spending.
Using an app like TimelyBills can help you track your expenses across different categories.

Focus on essential bills and payments only

While most governments, including the Canadian government, are offering relaxation in mortgage payments, student loans, and other types of loans, these relief packages come with a time stamp. You’ll have to resume payments post the current support period. Financial wisdom advises keeping your expenses to essential bills and payments only.


Get ready to boost your emergency savings fund

Financial research groups around the world are predicting hard times ahead, with loss of income and employment across the globe. You’ll need financial support beyond the current moratorium relief for loan payments.

It’s time to boost your savings, minimize discretionary spending, and deposit it in your emergency fund. It’s best to stick with financial accounts that provide liquidity and good returns, such as a high-yield savings account or a liquid CD. Considering the ongoing stock market volatility, it’s best to steer clear from equity investments for the time being.


Use technology to avoid overspending

If you’re new to budgeting, you may end up overspending on some categories. While traditional paper-based budgets or excel sheets may work fine, they don’t provide warnings when you overspend. Using an application like TimelyBills will help you stay on top of your budget and stay within your income limits. TimelyBills sends alerts as you approach or cross your set budget across any of the categories. You can also get monthly reports (category-wise) that can help you track your money habits.


Bottom Line

COVID-19 has put the entire world under never-seen-before circumstances. It’s critical to acknowledge the situation and get ready for the upcoming months.

What are your top financial concerns? Tell us in the comments section and our experts will provide appropriate strategies to handle them.


Comments

  1. Really good article to make yourself aware about importance of money management during this lockdown period

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