The Covid-19 pandemic has everyone all over the world in full crisis mode. While most Filipinos carry on with work-from-home setups, a lot of Filipinos are struggling financially, especially those who receive wages on a daily basis.
With their earning capacity severely affected by the Enhanced Community Quarantine, not all Filipinos are financially prepared to ride out this storm.
This is why it’s important to have a strong financial plan in place. We never know when a scary life-changing situation will happen.
But it’s never too late to have a pandemic-proof financial plan, even with this ‘new normal’ that we need to get used to. To achieve this, here are some of the things you need to focus on ASAP.
Having debts in an already stressful and fearful situation can add more stress and more burden on you.
Since we are still on Enhanced Community Quarantine, the priority is to put food on the table and pay off bills.
During lean times, it’s hard to set aside money to settle debts. But it’s an important part of protecting your finances during a pandemic.
Reduce your debts, or don’t add to your existing debts. You can start by paying your credit cards. This will greatly reduce your financial pressure.
If you can cut back on your credit card spending, that’s additional money saved, which can go to paying off other debts like your car or home loan.
Cut unnecessary spending
Stay at home orders are still in place. Work from home arrangements will likely continue even when the Enhanced Community Quarantine is lifted.
Take this opportunity to look at your expenses and where you can cut costs.
If you can learn how to do certain things by yourself, like coloring or cutting your own hair, cooking your own food, or working out in your living room, you can save money on gym memberships, salon treatments, and food deliveries.
Also, cancel your subscription to streaming services you barely use.
Money that you save can go directly to your savings account or emergency fund.
If you can survive on less, then you will have more to spend in the future.
Get a gig job
Having a steady source of income is good, especially during a pandemic. Getting a gig job or a sideline can also help, especially when your budget is tight.
A lot of these jobs can be found online. And since you can work remotely, you don’t need to worry about breaking quarantine or social distancing orders.
These temporary gig jobs can be lucrative enough to even become full-time jobs.
You can tutor or hold webinars if you’re an expert at something. Sell online or sign up on freelancing platforms. You also have the option to buy and deliver goods via ride hailing services.
Now is the best time to have multiple streams of income. Any skill, talent, or product can be turned into an earning opportunity.
Sell things you no longer need or want
Being on quarantine gives you time to clean around the house and get rid of things you no longer need.
Some of these things can be quite valuable to others, so why not sell them to make extra money?
Not only will you be decluttering your home. You can also have quick cash to help you pay the bills or add to your savings.
Have an emergency fund
During a pandemic, the bills will keep coming whether or not you have money to pay them. This is why having an emergency fund is important.
You can tap into these funds when something happens to your regular income streams.
If you want to know how much should be in your emergency fund, just remember that it should be enough to cover at least 3 to 6 months of living expenses.
You can’t build an emergency fund overnight. Unless of course you’re earning hundreds of thousands every month.
This usually takes months to save for, so it’s important to regularly put in money until you have the amount that you need.
Start small. Put away money that can sustain you and your loved ones for a month. And then from there, work your way through saving for a bigger emergency fund.
Get a life insurance or retirement plan
Covid-19 has everyone feeling scared. Having the protection of a life insurance or a retirement plan can help ease this fear.
A life insurance coverage ensures that your family will receive financial support if something bad happens to you. In the unfortunate event of illness or accident that results in your death, your loved ones can carry on without the financial burden.
In a pandemic like what we’re currently experiencing, you can also withdraw money from the fund value of your Variable Unit-Linked (VUL) policy .
There are many good insurance companies that offer this product, so make sure to check them out and get one for yourself!
The world market may be plummeting right now, but this should not be a reason for you to adopt a hopeless or desperate outlook. Especially when it comes to your financial situation.
There’s never a bad time to start taking care of your finances. If you can do something right now that will put you in a better financial situation, do it.
Pandemic or not, always prepare for the unexpected.
Don’t panic. You keep hearing this from everyone only because it’s the truth, and it will do you good in times of crisis.
If you have investment products even before the Covid-19 crisis, they will likely still work for you, even if the current situation looks bad from a financial perspective.
Having a pandemic-proof financial plan only means having money to survive on for an indefinite period until the crisis ends.
Furthermore, it’s about having a financial backup set up for yourself and your dependents when you can no longer provide financially.
Make sure to continuously work on your emergency fund by adapting a simpler lifestyle.
Diversify your income streams so that when you lose one (knock on wood), you’ll still be okay.
Safeguarding your finances today can be beneficial in the future. There are things that happen which are beyond our control, but being financially prepared can help you deal with them with ease.