The thought of having to face a major negative event that could have a negative impact on ones finances such as car accident, job loss or illness or even an pandemic can be stressing for people. However, with the right financial management knowledge, it becomes less threating. For example, the world today is faced with the pandemic of the Coronavirus which has had adverse impact on the global economy and thus affecting the financial status of people. Initially, the perception was that the coronavirus (COVID 19) would be localized in China, where the first case was reposted at the end of 2019. However, due to the free movement of people across the world, the virus has spread all over. This is a disease, which is caused by a family of viruses, causing the patient to experience mild to moderate respiratory illness. The virus is spread through getting into contact with saliva droplets of an infected patient. Therefore, individuals are requested to practice respiratory etiquette to reduce the spread of the virus. Along with the health issues caused by the virus, there is also social and economic pain as a result of the virus. People have been asked to stay at homes as organizations are closing down as one of the strategies to maintain the virus across various sectors.
During the quarantine times, it is very important that individuals think about their financial health, especially for those with no savings to fall to back on. Some of the ways that individuals should embrace to ensure they manage and save money during these times include:
Cut out the non-essentials: During these times, most people are stuck inside their houses with nowhere or need to go. This means that the earning are also limited, calling for a cut down of the unnecessary expenses. Individuals should now live more frugally by also avoiding expensive products e.g., buying a $10 bottle of wine will serve the same service as that of $ 30. On the other hand, individuals who get to order food online there is an added cost such as delivery. Therefore, cooking at home will cut down on costs.
Get on top of bills: While stuck in the house for a day or a month, it is evident that there are few things that one might not require. Paying for a product or a service that one doesn’t use is a waste of money. With many services suspended in need for social distancing, the payment of such things should be canceled or talk to the provider for a suspension of the payment until the need to use arises. Depending on the economic situation across the globe, most of the providers are likely to comply with the request. E.g., a gym membership that one is not using since they are stuck in the house is not worth a pay.
Lower mortgage/home loan repayment: As part of the government responses in most countries, there are various policies implemented, especially in relation to home mortgage loans and other debts. As a home loan customer, there is a chance for having the loan reduced in terms or suspended, which is a good thing if you can’t make the payment. Although paying the loan at a faster rate may be a good strategy but reducing or suspending the repayment is a much better strategy during the quarantine time. One might need the extra money while staying inside to beef up your savings and emergency funds until things get back to normal.
Get refunds of the canceled events: Some of the service providers within the economy prefer their clients to pay for services before they actually receive them. If any event has been canceled prior to receiving the service, e.g., a flight and one can no longer require the services, it would make more sense if one at least tries to get the money back. The amount can be used in other essential services to be saved for later use.