The Covid-19 pandemic changed our view of many things, including financial matters, as an emergency, and it also created new conditions that require dealing with different mechanisms, according to institutions specializing in financial consulting, such as “Nerdalot” and “ Bank Rit »which referred to five financial lessons gained importance during this pandemic.
An emergency fund
During the pandemic, the importance of an emergency fund to cover unforeseen expenses emerged, without the individual having to rely on credit cards or bank loans. The basic rule is that the individual has enough to cover living expenses for up to six months. And it is possible to start building the fund by setting a specific amount of the monthly income, or by transferring the funds automatically to an account designated for emergency funds, and to support these savings constantly whenever the opportunity is available through surplus funds. Here it should be clarified that holidays, events and gifts are not contingencies, as opposed to losing a job or medical bills.
Personal budget
Unpredictable accidents always emerge, the great role of the personal budget in prioritizing and overcoming crises, regardless of the conditions that we experience. Preparing and committing to the budget is the most important step at all times, as it is one of the most important pillars of financial planning, as it helps to achieve goals. And setting priorities for spending and instilling positive financial habits for individuals, as well as a tool that helps them to organize and manage financial life, control it, and control and repay debts according to a clear mechanism within the set items, and the possibility of saving some money. For the budget to succeed, it must be continually evaluated to identify progress made and overcome weaknesses.
Debt burden
Debt disposal is more important than ever, it often impedes our financial plans, and it increases fixed obligations, making access to financial independence more difficult. Debt, including mortgages, car payments, student loans, credit cards or other loan payments, makes up a fair amount of monthly income, which reduces the chances of saving money for emergencies or pension programs, although interest rates are low , It does not mean that getting an unnecessary loan is a good idea. Instead, it is better to devise a plan with the possibility of considering debt consolidation options, or refinancing to pay off the debt, allowing it to be repaid more quickly, with more flexibility in the long run.
Spending priorities
We live in a consumption-based economy, and this has turned upside down over the past few months, with forced closures, which has caused most of us to delay major purchases, such as buying a new car or house, or carrying out expensive home renovations, and making purchases Another great.
The pandemic has forced us to reassess needs, delaying major purchases is a great step if it will help individuals improve their financial situation, who already have financial problems and have obligations. A one or two year delay in purchasing a need may allow you to have enough money to make the purchase in cash instead of obtaining a loan. It will also save your monthly payments, and it will give you a better cash flow in the future.
Save money
Away from funds earmarked for emergency situations, work should be planned and planned to save some of the funds as much as possible, even if the amounts are small, and put them in a high-yield savings account, or a savings or investment program, by reviewing the spending categories and setting their priorities, while directing the secondary groups towards automatic saving directly. This can be started by setting a plan for spending, reviewing it, controlling it continuously, reviewing the value of monthly bills, and the ability to carry debts, while being cautious about purchasing decisions for luxury products, and instilling sound financial habits.
Debt often impedes our financial plans, and increases fixed obligations.