The COVID-19 crisis has not only caused a major health crisis across the world. It has and will further produce lots of financial havoc notably in personal finances, as jobs are lost and a substantial recession hits the overall economy. So how to manage your personal finances – alongside all additional challenges, such as homeschooling your kids? I recently came across an Afford Anything Podcast with Dan Ariely which contains a number of great tips.
In my first post for 2021, I will argue why financial health will become even more important this year. Certainly, 2020 has been hijacked by the COVID-19 pandemic on a scale we would have not imagined in our wildest dreams. As we enjoy in the first full week of 2021, the news is still dominated by the overwhelming negativity of the topic. With such a mega-event up in the air, there is the obvious risk of loosing sight of many other topics, financial health and financial education being one of them. As we all have become tired of Corona-news, it’s worthwhile thinking about things that matter beyond the pandemic. I firmly believe that taking care of your personal, financial health should be an immediate priority, for everyone. Why? Watch or read on!
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.