In last week’s blog post, I shared a number of tips on how to manage the COVID-19 crisis in your personal finances. I had mentioned the emergency fund as an important vehicle in your financial setup to manage unforeseen disasters. Set up the right way, the emergency fund can buffer away risks of intermittent earning and buy you loads of peace of mind. The importance of having an emergency fund has been underlined by the current COVID-19 situation. But how does it really work? What is best practice?
The COVID-19 pandemic and the societal and economic implications have overwhelmed us literally in every part of the world. After securing the health and safety of our families, we will need to look at the financial consequences we will have to manage. Losing jobs or reduced business will probably be the most dramatic impact on individuals and their financial situation. But also significant losses in the capital markets as well as ongoing volatility will impact those with investments. This article therefore gives practical tips on how to manage your personal finances and thus effectively navigate the COVID-19 storm.
The URL of my blog is myfinancialfreedom.blog. But what is financial freedom really about? Financial freedom is the third stage of a journey which fundamentally improves your financial situation step by step. The first stage is financial stability, the second stage is financial independence and the last stage is financial freedom. Financial freedom is most accurately defined such that all your expenses are covered by passive income streams. Read more about the three stages of financial freedom in this blog post!