5 Ways the Global Pandemic Can Personally Affect Your Finances
The coronavirus pandemic has endorsed a financial turmoil. Every person around the world is worried about their financial future. Thousands of people, worldwide, have lost their jobs during the pandemic. Essentially, those who are still fortunate enough to work, have to do it by placing their lives out on the line.
The confusion and chaos, stemming from this uncertainty, can lead to anxiety and abrupt financial decisions. If you are thinking about making a plan for your financial future, educate yourself on the prospect of the economy, before indulging in an impulsive decision.
How Coronavirus Pandemic Has Affected Finances
The current state of the economy
Currently, the economy is in shambles. Businesses all over the world have either shut down, postponed their operations or have carried out mass layoffs. The most saddening aspect of the whole situation is the fact that there is no estimated time provided, for when the economy may recover from this recession. For now, many governments have offered the citizens impacted by the recession with stimulus checks or programs, so they can continue to afford basic necessities. However, once a vaccine is created, or the enforced lockdown is lifted, the business can re-open and resume their functions to reconstruct the economy.
The impact on real estate
The real estate industry is most likely to be affected by the economic recession. As a numerous amount of people have lost their jobs or experienced pay-cuts, it is very unlikely for individuals to invest in property. Due to a decrease in the number of buyers and sellers, the real estate industry may struggle after the pandemic.
The necessity of building an emergency fund
If you are lucky enough to still have a job, it is imperative to start building an emergency fund. By this means, you would be financially stable for a few months, even in the unfortunate case that you lose your job. An emergency fund should include an amount of money that you could use for at least a six month period. You can prepare this fund by allocating a certain amount of your income to your future. An emergency fund can offer you benefits, even when the pandemic is over.
The state of your investments
If you previously made some investments, and are thinking about withdrawing your funds, you should reconsider. Currently, economists are divided over the accurate step to take in this situation. However, if you are able to survive financially, without making any withdrawals, you may leave your investments as they are. However, if you feel that you might need the invested money in a few months, you can withdraw your finds and place it in a high-yield savings amount. As a result, you can still generate income from the investment, while having the comfort of knowing that you can still access your financial assets.
Bouncing back from unemployment
If you have lost your job due to the pandemic, you can still take measures to secure your financial future. Before pulling out your investments, consider using your savings or emergency fund. If you do not have a contingency plan, such as an emergency fund, you can apply to receive unemployment paychecks. However, you can only receive a payment if you meet the eligibility criteria for unemployment.
All in all, the current state of the economy is very volatile. Therefore, it is recommended to avoid making any rash financial decisions during this time. Prevent yourself from withdrawing your investments, unless it becomes absolutely necessary. You may also start an emergency fund or a high-yield savings account, to ensure financial security in the upcoming future.