The pandemic has changed all that we knew about this world and ourselves. It has changed the ways in which we behave and interact with other people, how we run our businesses and go about our lives. The global economy has never seen such bleak days in decades, and therefore when the pandemic hit us towards the end of 2019, and the economy came crashing in a few weeks, no one had any clue how to deal with the situation. Industries shut down one after the other, and organizations quickly went out of business. Millions of people all around the globe lost their means of livelihood in the blink of an eye. Therefore, the virus not claimed lives but also put people out of jobs. Those who had a backup fund to fall back on could absorb the shock and navigate through the crisis. However, those who had nothing to fall back on found themselves in a precarious condition.

Therefore, besides bringing to light the loopholes in the governance of many nations, the COVID-19 crisis also shed light on how careless we have been with our personal savings. Most of us had the privilege and opportunity to earn money. However, we have been irresponsible with the same and spent them without any control over ourselves. This left nothing in our savings, and therefore, when the pandemic hit us, people perished more due to the loss of livelihood than the virus. Having said that, in this article, we shall talk about a few things that all of us can do to have a healthy approach to personal savings so that in times such as these, we can have something to fall back on.

Set up a budget before anything else

The first thing that you must do before anything else when it comes to personal savings is set up a budget. You need to first be aware of your budget constraint and your financial situation. Everyone has a different constraint, and different abilities to spend money and your budget must be set according to that. Begin by taking stock of your pre and post COVID-19 income and spending. Check where you have to spend and where you can cut down. Find some alternatives to your daily dose of entertainment so that you can save more. Check some of the upcoming gambling events and see if you could play from your house rather than be physically present at the venue. This way, you can make better financial decisions and set up a budget that works well for you.

Always try to cut down on your expenses and see to it that you are saving more than you spend. This will ensure that you have a solid bank balance and ease the lines on your forehead when a situation like the pandemic crops up. In fact, even when this is all over, do not slack on budgeting. Having a carefully worked out budget will always come in handy and help you deal with situations better. Therefore, the first thing to do is to set up a budget.

Have a rainy day fund

Now that we have spoken at length about budgeting and the importance of the same, it is crucial that we talk about having a rainy day fund. Now, it is vital to remember that having a budget is not the same as having a rainy day fund. You can plan on setting aside a portion of your income for your rainy day fund. But it is the money in your rainy day or emergency fund that shall come in handy in adverse situations like these. The pandemic, sudden job losses and a sharp decline in investments are enough reasons to start setting aside some money for your emergency or backup fund. You cannot start saving at a day’s notice and build a fund overnight. You need months of planning and investment for a fund like that. Therefore, start saving money in your rainy-day fund today to save yourself from all the trouble later.

Manage your debts

In an ideal world, there would be no debts and loan sharks, making our lives miserable. But this is not an ideal world that we are living in; therefore, no matter how much we try and how financially stable we are, some amount of debts will always be a part of our lives. However, the idea here is to manage them well. Once you allow debts to pile up and do not clear them off immediately, you shall fall into the vicious debt trap. This could severely impact your credit score, and your personal savings could take a massive hit. Therefore, see to it that you are paying off your debts on time and not piling it up. In case you needed help with paying off your debts, you can reach out to some credible financial resources and aids. These aids help defaulters pay their debts and manage the legal and financial repercussions.

Stay committed to your plan

Starting a plan to save money is not enough. You will also need to go through with it and stay committed. You shall have several temptations to spend your money mindlessly on the way, but you must know better. Ensure that you have thought your budget through and are sticking to it. If you have troubles sticking to your plan, consider doing it together with a buddy. This shall help you stay on track and save better.

Conclusion

Personal finance is one of the most important parts of our lives, and there is no way one can afford to miss planning for the same. It is as important as any of your business investment because this is what is going to save you when the times are bleak and help you stay afloat. Therefore, make sure that you pay attention to this aspect of your life and keep yourself and your loved ones prepared to face any adversities.