Due to COVID-19, millions have lost their jobs and become financially unstable. As the world slowly emerges from this pandemic, we may find new financial obstacles before us in the future. Many of us have been “sheltering in place” due to the virus and the accompanying social-distancing regulations, and this, in itself, has affected people’s financial status – in some ways for the better, in some cases for the worse. As buildings, offices, and schools start to reopen, what financial steps can we take as we prepare to return?
Beyond any lifestyle changes, every parent and professional should take time for a financial check-up before returning to work or school, as Covid-19 brought many financial fears into play for people across the world. With the loss of a job or financial hit to retirement savings, many are feeling the financial stress Covid-19 is having on our wallets.
Re-build emergency fund
Before returning to our offices or school, I would recommend preparing for any possible future crisis with an emergency fund. If you were fortunate enough to keep your job, add some cushion to your fund. If you lost your job due to the pandemic and are now returning to the workforce, begin re-building your emergency fund, and slowly add more and more into it until you reach the recommended goal of six months’ worth of expenses.
Prepare for an increase in expenses
With working from home, no travel or vacations, and not eating out, our budgets have most likely seen some relief and our checking accounts have gotten a bit fatter. If you are going back to the office, expect expenses to creep back up. Don’t fall into bad spending habits that undo all the gains you saw in your account during quarantine, or worse – have you going into debt!
Next, I would also recommend going over your finances with your spouse or family member to ensure that you are all on the same page. Take the time to do a financial check-in with your spouse as a date night. If you are single, sit down with loved ones to review your financials, in case you were to catch Covid-19 and become hospitalized, or couldn’t return to work .
We’ve all made lifestyle changes over the last seven months. If you were able to cut costs while quarantining at home, see if you can continue to keep those expenses low. For example, continue to cook at home instead of eating out. Utilize a new budgeting app such as Mint, GoodBudget, or YouNeedABudget to cut costs.
Double-check insurance coverage
If you’re starting a new job with new health insurance, know that even if you have met your deductible with a previous plan, your new coverage will likely require that a new deductible be met. Confirm what kind of hit your budget might take in this scenario.
As we start to take steps toward a post-pandemic new normal, it is important to recognize that our finances have changed over the months in quarantine. This next phase will be a critical one, and we’d do well to take it slow, and make the adjustments needed to recover from the financial hits we’ve taken, and to use what we’ve learned to clear any remaining financial hurdles to come.