No one could have predicted the pandemic situation and unfortunately, it didn’t only change our daily lifestyle – but it also dealt a big blow to the economy. Many things are still uncertain, but one thing we must keep in mind: there is no room for panic. Keeping calm and analysing what options are available to you will pay off in the long term, making decisions based on emotions can leave you with bigger problems and sometimes in a lot of debt.
It's important to do your best to stay safe, but it's also important to keep thinking ahead. Therefore, it's never been a better time to learn how to manage your money in an efficient way. Alex MacEwen, expert at The Wealth Consultant shares his wisdom so you can manage your money well during Covid-19, from the panic signs to look out for, mistakes to avoid and how to cope.
Signs of Financial Hardship During The Pandemic Situation
The pandemic situation has hit the economy hard and hundreds of thousands of people are out of work. Whether it's only temporary or whether it's permanent - the loss of an income stream is a massive factor in financial hardship.
You might still have enough savings to take care of yourself and your family - but not everyone's financial situation is the same. If you don't have a lot of savings, and yet you still have mortgage & rent payments, credit card debts, or overdrafts - you'll be in a tricky situation to say the least.
Most of the people automatically access fixed savings - and even though this is a good temporary solution, depending on the economy - this could be another sign of financial hardship.
Savings run out and without being able to recover the main income stream quickly enough - financial hardship is getting closer and closer. As we've mentioned earlier, most things are still uncertain during these unprecedented circumstances. One of these things is the timing and the way the economy will recover.
If you are stuck in this terrible situation, the last thing you should do is blame yourself. However, what you can do is avoid the most common mistakes which will only speed up the process of reaching a more extreme situation.
Mistakes to Avoid
The pandemic has brought a lot of fear and uncertainty - and even though it’s not a time for panic, you shouldn't allow your emotions to rule your next moves.
We may not know when everything will return to normal (and what that normal will look like) or how quickly will the economy recover - emotional-based decisions that are rushed can only increase your financial burden.
Survival instincts will kick in, even if this crisis opposes both health & financial issues. The first thing most people think about is selling assets. This is something you should avoid at all costs. And if you are reaching into your savings - you shouldn't spend all the money you have.
But how does one spend savings without spending all the money in these challenging times? It's tough - just like it is to overextend mortgages and overdrafts - which is another thing you shouldn't do.
It's the most common mistake. Even though it seems like a great idea at first - it will leave you in a lot of trouble in the long run.
It's important to think about the economy during Covid-19 as a long game and therefore, make a decision that will benefit you more in the long run rather than in the short term.
As you can see, there are a couple of mistakes you should avoid in order to easily recover from your financial hardship as soon as everything gets back to normal.
But is there a right way to cope with your financial situation during the Covid-19 pandemic situation? Of course, there is!
How to Cope
By now, you know that you shouldn't make your decisions based on your emotions. Therefore, the correct way to cope with the financial hardship of the pandemic situation is to remain calm.
Instead of selling everything you have in order to cover your financial needs in the short run - it's important to think ahead.
What will benefit your financial situation in the long run? No one's financial situation is certain and stable right now - but this pandemic won't last forever.
Therefore, you should investigate the benefits available in your location. The government is helping individuals and small business owners financially so if you didn't apply for benefits already - this is the first thing you should do.
Opening an ISA and making savings where possible is not everyone's strong suit - but that's exactly what's recommended during the pandemic situation. On the bright side, there are professionals who you can talk to and receive advice according to your individual circumstances.
While everyone is saving and doing their best to keep their money safe - investing in a wealth manager is a decision that not many even think about.
Wealth managers won't only give you advice, but they will also show you how to take control of your finances and will even create a detailed plan on what steps to take to come out of the financial crisis as a winner.
This piece was brought to you by the experts at https://www.thewealthconsultant.co.uk/