How to Feel More Financially Secure in the Wake of the Pandemic

by Maurie Backman | Published on Aug. 21, 2021

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The pandemic caused a lot of people a fair amount of financial stress. Here's how to improve your outlook at this stage of the game.

The coronavirus pandemic hit a lot of people hard. Millions of Americans lost their jobs, while others suffered income loss or struggled with added expenses that impacted their finances in a very meaningful way. If you're feeling financially shaky in the wake of the pandemic, here are a few moves you can make to change your outlook for the better.

1. Build a solid emergency fund

The pandemic taught us that the unthinkable could happen and that it's important to be prepared for months without an income. And that's where a solid emergency fund comes in.

For most people, having three to six months' worth of living expenses in a savings account is a solid means of financial protection. But if you have a variable income or you're the sole breadwinner in your household with multiple children relying on you, then you may want to aim a little higher by saving seven or eight months' worth of expenses. That way, you'll have a nice cushion in case something happens to your job or in case you encounter another situation where a major need for money arises.

2. Establish a backup income plan

Having a side job on top of your main one is a good way to get some income-related security. But if your work schedule is such that you can't swing a second job right now, then you should, at the very least, put together a plan for what you might do if you were to lose your job and struggle to find another.

That plan could involve starting your own business, working for a friend's business, driving for a rideshare company, or something else to get you by until you can find work in your regular field. The key is to have that plan established so that if you're laid off, you're not completely lost.

3. Get on a budget

The better you get about sticking to a budget, the easier it'll be to manage your money and find ways to save more of it. If you don't have a budget already, it could pay to check out some of the best budgeting apps out there, which will help you set up a budget and follow it with ease.

4. Have an expense-cutting strategy

If you're working and earning your usual paycheck right now, and you're not spending it in its entirety, then you may not have to go on an expense-cutting spree just yet. But it is a good idea to know what expenses you can and will cut if your job were to be taken away.

Once you have your budget in place, review your expenses and figure out which ones can be most easily slashed. You might, for example, decide that if need be, you'll dump your cable plan, pull your kids out of gymnastics for a bit, and cut out all restaurant meals until you're gainfully employed again. Having that strategy in place could make you feel better about your circumstances.

Get the peace of mind you need

Even if your finances haven't taken a hit during the pandemic, you may still be feeling anxious given the events of the past year. These moves could give you some much-needed peace of mind at a time when a lot of people are still mentally recovering from a crisis unlike any other we've been through.

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