5 SMART MONEY MOVES TO MAKE PUSH THROUGH THE PANDEMIC

The COVID-19 Pandemic continues to take a toll on our economy and indeed on all economies around the world. Many businesses and individuals have been affected. Most notable of the effects is a negative impact on business operations and indeed revenue for most companies. As a result, companies have taken initiatives to reduce costs and among these are layoffs of staff

Many people have lost jobs and others are still stuck at home because of the government guidelines. Small businesses like saloons, Boda Bodas, schools and those in the hospitality sector have been grossly affected. Initially, some people took the pandemic for granted only to wake up to a hard reality that it was not only a healthy crisis but also an economic one.

Also, we thought it was mainly affecting those in the informal sector until huge companies were affected and had to cut salaries and even lay off staff. Most recently, I read how most bigger companies with one of the biggest employers in Uganda was contemplating laying off redundant staff. Luckily for most of them, the government intervened, and this was put on hold. However, you cannot be sure that they have escaped the red zone.

I am sure I wouldn’t need to explain the plight of teachers especially those in the private sector as well as those who work for hotels. In the US, over 40 million people have had their jobs lost or working time reduced hence incomes affected in first wave of the pandemic and other's are still stuck. There is no clear sign of how long this will last so that the world can return to normality.

Despite all the gloom, not everything and everyone has been affected. We have people who are still employed and those earning from their businesses. Those employed may continue to get benefits from their employers like health insurance alongside the paychecks.

If you fall in the category of people who are still employed and still earning, there are a number of money moves you should consider making to avoid shocks that may come ahead. There is still a lot of uncertainty about how the situation will end. I would like to share some of them and that is the purpose of the article.

The moves suggested are aimed at helping you get your finances in order so you can sail through the tough times that many are experiencing. Below are the suggested moves;

1. Focus on Building Your Emergency Fund:
   Honestly this is something that I emphasize a lot. It is unfortunate that very few people have developed enough discipline to set aside some money just for the sake of catering for emergencies. Many of the people I interact with are focused on living for the moment with a little focus on what could happen if their incomes were affected.

COVID-19 has finally made people realize how helpful an emergency fund can be. , I detailed this. Think about it, how are the people who lost jobs surviving in this time?

Having an emergency fund offers you breathing room when an emergency / tough situation like loss of employment sets in. If you are still working or earning income and didn’t have an emergency fund, I implore you to start building one. It is recommended that you have savings worth at least 3-6 months of living expenses for starters. Of course, the more months you can cover the better.

I understand you may not start with all this amount to cover you for 6 months. The most important thing is that you must start. You can start with an emergency fund for 1 day, one week, one months and keep growing it till you reach a comfortable point of say 12 months. This will require patience, discipline and careful management of your expenses. You will need to cut down on the unnecessary expenditure and become frugal.

I am sure some readers may not appreciate the purpose of setting this money aside when they are doing well but like COVID-19 perfectly illustrates, life can become unpredictable. The more you safeguard yourself against the shocks that it presents, the better for you.

1. Choose a Conservative Lifestyle

I know that many of us have a mentality that because we work hard to earn income, we must enjoy it while it lasts. I sometimes get amazed by acquaintances who live lavishly at the end of the month upon receipt of their salaries and are back to zero by mid months. Yes, you may have managed to survive with that kind of lifestyles, but this is not the time to live like that.

With the uncertainty that lies ahead of us, you may find it prudent to reduce on your luxury spending as you study the situation and the impact it may have on your incomes and finances. I appreciate that it is hard to let go of a luxurious lifestyle once you are accustomed to it especially if you are still earning; sometimes even higher than previously. It is tough to let go of Café’ Javas’ meals and opt for cooking at home.

Despite this, my advice is that even if you can afford a higher tier of comfort and luxury stick with the next lower tier and put the extra money towards building an emergency fund and prepare for the uncertainty that life may present ahead.

1. Understand & Manage Your Debt

Surely, the most important thing is this covid-19 period is making sure that you survive and get to the other side of victory when you have not been badly affected. As I have already mentioned, having an emergency fund gives you some room of comfort and allows you to remain productive.

While you try to build up an emergency fund, I would encourage you to ensure that you do not let your debt slip through. It is very possible that many of us will keep focused on surviving and forget debt obligations if you have any. Ignoring your debt especially if it has high or compound interest can pull you back from overcoming the financial hurdles.

In such a time, it is imperative that you take some time to review your debt and the terms that come with it. Taking time to review will help you to appreciate how much debt you have, what types of debts you have and the interest rates as well as their nature. This will help you to prioritize and decide on which strategies to use to handle or pay it. Taking this time to reflect may even help you to know whether you can reschedule the payment period for the debt especially if the lender offers you that option.

In all this, you must ensure that you avoid consumer debt which many people are likely to incur because if panic and impulsive purchases.

1. Postpone Large and Unnecessary Purchases
   As the economy gets tough and people are struggling with keeping up with their finances, companies are also getting more cunning in their marketing. They are looking for all possible ways to entice you to spend that little cash that you have with you. When you visit ecommerce sites, you will be tempted by the “massive discounts” that you may be tempted to even purchase what you don’t need now.

Now is not that time to upgrade your home furniture or appliances. While this may be debatable but now may also not be that best time to upgrade your kitchen fittings just to give them a facelift. It is probably best to put those plans on hold and study the situation and prepare for the worst. You can be sure that more companies will take extra measures including lay offs in the time to come. You don’t want to make a huge purchase only to sell it soon when the situation turns tougher.

Of course, it goes back to your cash flows and how you have always prepared yourself for such a time. But the best thing to do now is to ensure less bills, the better, should the economy take a turn for the worst.

1. Get Back to Basics – Budgeting
   I consider budgeting as the most basic item each one of us has to do with their personal finances. I appreciate that this is not the most fun advice you would want to hear but looking at your budget is the very first step you should take when you have a change in income or expenses.

Budgeting opens / closes the doors of what we should and should not do with the finances that we have. Budgeting will help you to appreciate how much income you have, the expenses to be made and guides you to focus on what is necessary. As more and more people are getting a grip on their finances, it makes sense to ensure that you appreciate and each penny of yours is well catered for. You must know where it is going.

The more you familiarize yourself with budgeting, the more you will be able to identify areas that you can cut on and refocus your priorities. In the end, you will find some money to save for your emergency account. In such a time, get back to the basics and ensure that you are doing everything the right way from the start.

Parting Thoughts
While many countries have already started to ease out the lockdown measures undertaken to prevent the spread of COVID-19, the effects are still here, and many businesses are feeling the pinch. Do not take it for granted and you are still employed / earning. Now is the time to ensure that you do not make any money moves that will set you back in case something goes wrong. For a financially literate person, it is better to plan for the unknown. Act like you will lose your job tomorrow when it comes to managing your finances.

1. Explore Online businesses and engagements.

One thing I love about this one is it's very appealing, for many reasons it's becoming becoming a new trend for most people to engage,learn and market there products.

The truth is this will help you create your own world and rely purely upon yourself, which by the way is a very amazing feeling. Your belief systems will try to limit you, but if you understand how it really works, you can remove the limits for yourself and roll through the online space!

Have a great weekend ahead of you. Let’s meet next week in another article.
I invite you to please follow me as we seek to learn how to manage our finances better during this pandemic.

With love and purpose!

I'm Edmond a writer and business consultant!