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TRENDING BASIC MONEY MANAGEMENT TIPS
09.23.2020 / Budgeting « Back to all articles
Rebuilding Your Savings Post COVID-19
The COVID-19 pandemic has upended economies all over the world. If you were one of the millions of people who had to dip into their emergency funds to make ends meet, you're probably wondering what financial steps to take next. Should you rebuild savings, or should you focus on paying off debt? The answer is probably both.
The Importance of an Emergency Fund
If you have depleted your emergency fund during the COVID-19 pandemic, you have seen first-hand how vital it is to have funds in reserve. However, if things are still tight, you may wonder whether the time is right to rebuild savings. The short answer is yes. If you don't reconstruct your financial buffer as soon as possible, you risk falling behind and leaving yourself open to further money troubles, such as excessive credit card debt.
How To Rebuild Savings During Times of Hardship
You can begin to reconstruct your emergency fund even before things return to normal. It takes discipline and creative thinking, but it is possible. The first step is to figure out exactly how much you need in your bare-bones, survival budget. Every time you think about adding something back into your budget, consider allocating that money into your emergency savings, instead. As long as you can make minimum payments on any debt you carry, consider putting off significant debt payments until after you have at least a small buffer.
How Much To Save for Emergencies
Many financial advisors recommend setting aside $1,000 to start. This amount should get you through small emergencies, such as appliance replacement and minor auto repairs. However, with the uncertainty in the global economy, now is the time to save more if you possibly can. Try to set aside at least three to six months' living expenses. Remember, this isn't three to six months of living your ideal lifestyle; this is three to six months in survival mode. Calculate what that range looks like for you and write it down as a goal.
If you're still struggling to make ends meet, much less save for the future, look for ways to increase your income until your financial cushion is back in place. Try gig work, taking on a second job if you can find one, or selling some of your possessions. Do whatever it takes to give yourself breathing room. Focus on the fact that the COVID-19 pandemic, and the associated economic upheaval, will eventually pass. All you need to do right now is stay as healthy as possible and keep a roof over your head. As long as you have what you need to survive this month and as far into the future as you can manage, you can wait until later to work on eliminating debt, saving for retirement, and so on.
Credit Talk
09.23.2020 / Budgeting « Back to all articles
Rebuilding Your Savings Post COVID-19
The COVID-19 pandemic has upended economies all over the world. If you were one of the millions of people who had to dip into their emergency funds to make ends meet, you're probably wondering what financial steps to take next. Should you rebuild savings, or should you focus on paying off debt? The answer is probably both.
The Importance of an Emergency Fund
If you have depleted your emergency fund during the COVID-19 pandemic, you have seen first-hand how vital it is to have funds in reserve. However, if things are still tight, you may wonder whether the time is right to rebuild savings. The short answer is yes. If you don't reconstruct your financial buffer as soon as possible, you risk falling behind and leaving yourself open to further money troubles, such as excessive credit card debt.
How To Rebuild Savings During Times of Hardship
You can begin to reconstruct your emergency fund even before things return to normal. It takes discipline and creative thinking, but it is possible. The first step is to figure out exactly how much you need in your bare-bones, survival budget. Every time you think about adding something back into your budget, consider allocating that money into your emergency savings, instead. As long as you can make minimum payments on any debt you carry, consider putting off significant debt payments until after you have at least a small buffer.
How Much To Save for Emergencies
Many financial advisors recommend setting aside $1,000 to start. This amount should get you through small emergencies, such as appliance replacement and minor auto repairs. However, with the uncertainty in the global economy, now is the time to save more if you possibly can. Try to set aside at least three to six months' living expenses. Remember, this isn't three to six months of living your ideal lifestyle; this is three to six months in survival mode. Calculate what that range looks like for you and write it down as a goal.
If you're still struggling to make ends meet, much less save for the future, look for ways to increase your income until your financial cushion is back in place. Try gig work, taking on a second job if you can find one, or selling some of your possessions. Do whatever it takes to give yourself breathing room. Focus on the fact that the COVID-19 pandemic, and the associated economic upheaval, will eventually pass. All you need to do right now is stay as healthy as possible and keep a roof over your head. As long as you have what you need to survive this month and as far into the future as you can manage, you can wait until later to work on eliminating debt, saving for retirement, and so on.
