The COVID-19 pandemic has ushered in a shift in the way businesses and individuals view money management, and it offers us all valuable insights in making our finances more resilient. A few trends have emerged in saving, spending, and investment habits during this time, and as a financial institution, we’ve witnessed these trends playing out firsthand. Today, we’re passing on some of the best lessons we’ve learned.

Be prepared

Just as natural disasters like floods and tornadoes are best endured through preparation, economic disruptions like the pandemic are much easier to get through if you’re ready. While there is no way to predict exactly when a big financial shake-up will occur, there are steps we can take to mitigate its negative impact. First and foremost, this means establishing an emergency fund. A recent survey found that most Americans are not prepared for an economic emergency, but this only emphasizes its importance. Having some money set aside ensures that when your car breaks down, or your kid falls off their bike extra enthusiastically, or a respiratory disease blankets the entire world and closes basically everything, you will be able to stay afloat without borrowing at interest.

Follow the money

A lot of us take a pretty casual approach to tracking our money: we spend and save without really knowing how much is coming in or going out, or what it’s going toward. As a result, the majority of Americans engage in wasteful spending practices that may cost over $100 dollars a month. The good news is that with a small initial effort, you can have an informed view of your finances. That knowledge is the first step toward saving money (see tip one) and having more security during a crisis. If you’re having trouble figuring out the inflow and outflow of cash in your life, there are a number of tools that can help you, including our Money Manager tool available in our mobile app.

Control your cash

Once you have the map of your money logistics drawn up, you can see where you need to tweak your habits. Setting a budget for problem areas in your life may be difficult at first, but pay dividends in the long run. Does your money map reveal you eat out four nights a week, even though you would have sworn it was less than two? You’re probably not alone! Americans spend $3,000 a year in this department. Are there subscriptions you have that you could do without? Perform an audit of all the services you subscribe to and figure out which are really important to you. Each unnecessary expenditure you cut out improves your financial health, with the added benefit that you’ll already be a lean, mean, money-saving machine in the event of an economic downturn.  

Multiply your streams of income

Diversifying your sources of income makes it harder for unexpected events, like a pandemic, to knock your life out of whack. Do you have a spare room in your house, or an entire property, that could help you make money? Are there ways you could use your professional skills to set up a little freelance side hustle? Would this be a good time for you to finally start investing in stocks? Any way you can find to bring money in besides your principal job gives you breathing room if your hours get reduced or you’re laid off.

The COVID-19 pandemic has forced us all to consider our spending and saving in ways we wouldn’t have otherwise. Keep these lessons in mind as you move forward, and your finances will be much more stable than before. Some of these tips may cost you time or energy when you’re getting the hang of them, but peace of mind? That’s priceless! For more tips on keeping your money headed in the right direction, visit https://efirstbankblog.com/find-financial-freedom-with-these-four-tips/

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