Managing your personal finances during coronavirus (Covid 19)

Managing your personal finances during coronavirus (Covid 19)

The spread of COVID-19 has changed the global landscape, affecting our financial environments. This article explains better ways to manage our personal finances and buffer ourselves against the financial emergency caused by COVID-19.
Ways to weather the pandemic storm and plan for your financial future.
1. Saving: Through savings one can start up a buisness. The return on savings acount are at a records low, Even with low interest rates, saving still makes sense to provide a buffer against further disruption and emergencies.
2. Investing: For long term objective or higher returns, inevitably you must take on more risk. investment in real asset and financial asset is very important.
3. Borrowing: Fund from borrowing from friend, family, local lenders, organizations with less interest rate can be used in startup or investment. Dont borrow to spend
4. Spending: It is natural to spend less if you are worried about the future. But this creates a classic dilemma, first analysed by economist, John Maynard Keynes, during the 1930s depression: if consumers don’t spend, the economy contracts. This results in job losses and falling household incomes
lessons on personal finance from the Covid-19 pandemic
A) Adequate Emergency funds

Covid-19 crisis has shown the wisdom of having adequate emergency funds. If there is a pay cut, a delay in salary, or job loss, an emergency fund can help you tide through difficult times.
B) Having an alternative source of income

Putting all of your eggs in one basket is never a good thing, having alternative source of income will help you meet these necessary expenses and tide over difficult times. There is no magical limit as to the number of extra income streams you should create.
C) Investment diversification

Diversification premium is an investment cure for coronavirus. Having a mix of assets across sectors and geographies is the best way to ensure that one spell of volatility, as in this pandemic, does not take your portfolio down.
D) If you don’t measure it, you can’t manage it

As Covid-19 infests income sources, many families are now forced to closely consider how to spend every available naira. If you have lost your job or now receive a reduced paycheque, how long will you be able to meet your basic needs?
Try Budgeting, it is the most basic and effective tool for managing your money.
E) Health is also wealth

The penetration of health insurance is very low in Nigeria. However, in such a pandemic-like situation, health insurance helps you to cover any medical cost without disturbing your investments. Even if your employer provides health insurance, it’s always better to have your own insurance. This is because the health insurance offered by your employer won’t be in effect in the event of a layoff/job loss.

Staying financially secure is a crucial step in getting through your daily life, and this challenging time has once again instilled this lesson. Tough times do not last, but tough people do. Lets be pessimistic and positive.

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