Yup, that was a dumb idea – I blame social distancing!
On a serious note, now that we’re over a year into coronavirus…
Which of the 4 situations are you in?
Read on to find out which situation you’re in and the best things you can do to improve your finances in these uncertain times.
1) Have a job and have savings
Congratulations, you’re one of the fortunate few. Try your best to keep the job, don’t slack off if you’re working from home. If your company is going to make redundancies, you want your name to be on the bottom of the list.
If you have savings to cover 6-12 months then you’re safe. If not, I would suggest you try and tighten the purse strings and try and build that emergency fund up. Luckily spending less is easy to do when you’re on lockdown.
2) Have a job and no savings
Count yourself lucky, you have a job. 1 in 20 have lost their job due to coronavirus. You’re safe for now. As with situation number 1, keep working hard and don’t slack off if you’re working from home. More than ever, you don’t want to get the sack.
Now is the time to start building an emergency fund. Your aim is 6-12 months of expenses. Being in lockdown is a great opportunity to save as there’s less to spend your money on.
3) No job and have savings
You have savings, which is great. Some people call it a ‘rainy day fund’. Well, guess what, it’s raining! Don’t feel bad about using your savings.
Given that you don’t know when you’ll be working again, it’s important to stretch your savings out as much as possible. This means trimming expenses like your mobile phone contract for example.
You’ve probably got lots of spare time. Use this time for personal development, so when the economy is on the up, you can get a new job faster and who knows, you might even be able to command a pay rise!
4) No job and no savings
Listen, this sucks. There’s no magic solution here. Dig deep, this is the time you need to be resilient, you will get through this.
You need to scramble to get some money together. What can you sell? Old phones and electronics. eBay any clothes and valuables. What can you save money on? Reduce bills and other expenses. Do online surveys. Claim for a refund on your upcoming holiday. Seek government support.
Are you able to ask family for support? If you’re going to ask for money from friends and family, treat them like a bank. Write on a piece of paper how much you’re going to borrow, what interest rate you’re borrowing at and when you will pay it back. This can be a win for all. Some people would jump at 5% interest rate and it will be saving you the 10 to 30% APR it would cost you to borrow.
Debt during Coronavirus
Coronavirus has impacted many of our jobs and if you weren’t in debt already, it’s more likely that you will be in the coming months. Here are my replies to the most popular Coronavirus debt questions on Twitter:
Investment during Coronavirus
The elephant in the room is that through no fault of your own, you’re in a less secure position than a couple of months ago and your previous investment decisions are coming back to haunt you.
Read my article on investment during Coronavirus and I guarantee you’ll feel better about your situation and be in the mindset to capitalise from this financial crisis:
These are testing times financially. Think tactically day-to-day, but also take a moment to take a step back and think strategically. What you do in these times will have a ripple effect for the rest of your life.