Life is tough. times are challenging. Regardless of your situation, you should plan for the future. Financial advisors recommend that you save at least six months of expenses as your emergency fund. For those of you who already had this in place before the pandemic, I am sure that you are thankful to have this extra cushion. It is never too late to start saving for your emergency fund.
Now more than ever, you should re-evaluate all your household expenses. Can you cut down on your cable bill? What about your cell phone bill? What about the cleaning service? You get the point. Take a hard look at all your expenses and figure out what you can cut out completely and what you can reduce. My household was able to cut our TV bill almost in half because we got rid of our expensive satellite TV service and doubled down on streaming. We realized that we were paying way too much for more than we needed.
You also should take a similar approach for your personal expenses.Take a hard look at your regular monthly expenses and your splurge expenses. Think about what is absolutely necessary and what is a “nice to have.” Do you really need to spend $5.00 for coffee almost every day? Can you cancel or suspend your gym membership and work out at home? Do you really need to buy new clothes right now?
It should be very clear what you can cut out and what you can reduce. Most of us live beyond our means. Now is a good time to level set your spending habits.
Once you reduce your expenses, think about how much of this differential you can start saving each month. It doesn’t have to be a lot, but saving a little is better than not saving at all. If you already save, then think about how much more you can save each month. Most people live paycheck to paycheck; so if you can save a little bit, you are ahead of most people.
The more you plan for your financial future, the better you will come out ahead after this pandemic passes and when life gets back to our “new normal.” You never know when another hardship will happen; so it is better to over plan than under plan.
A good financial advisor can assist you in an asset allocation and savings plan. Most successful people have financial advisors, so consider finding one if you are without one.
Although life is tough now, it will get better. Times are challenging, but they will get better. Protect yourself and plan for the future. You will be glad that you prepared. You can still live your life but pay more attention to your spending habits. Most of us can cut down and cut out certain items in our lives.
Most of us tend to take our lives for granted, which is okay for normal circumstances. However, in times like these, we should take a step back, appreciate what we have and re-evaluate our lives.