The pandemic could be many things to the health and business sector. To families, though, it is a financial crisis, which no one saw coming.
Millions of families struggled around the world during the pandemic, especially those with lower incomes. Because it was an unforeseen situation that closed down industries, many people lost their jobs. Thus, they struggled with their daily expenses, including food on the table and paying their bills. Some even lost their homes because they couldn’t afford rent.
According to the survey by YouGov for Forbes Advisor, most Americans could only save one to three months of their expenses for emergencies. But, during the pandemic, 73.3% of the survey respondents already used up half or more of their savings.
Some families had enough to put food on their tables. But, most of them struggled with paying their rent and their bills. This is why financial experts always recommend setting aside funds for specific aspects of daily living. But because most families were caught off-guard, they had to make emergency financial actions to survive the pandemic.
According to a survey conducted by CNBC + Acorns Invest in You, 13% of the respondents used up their savings or asked for financial help. Around 12% relied on their savings account. Meanwhile, 12% borrowed money from others, while 11% relied on food banks.
While the world didn’t see it coming, the pandemic should serve as a lesson for families to prepare for emergencies. There are many ways to cut down on household expenses so you can double or triple your savings. Here are some financial tips you might want to consider:
- Save electricity.
Families spend most of their time at home during the pandemic. Because the whole family is complete 24/7, they consume electricity higher than their usual consumption. According to a survey conducted by SurveyMonkey, 91% of Americans were home this summer because of the remote work setup and the distance learning. Because of this, 78% of Americans were worried about home energy costs. Yet, not everyone is taking action on how to save energy.
The U.S. Department of Energy recommends setting your thermostats below 78 degrees to be able to save energy. Regular maintenance and cleaning of your heat and cooling systems will also prevent you from high energy consumption.
However, many Americans are now considering alternative sources of energy not only to cut on energy costs but also for environmental concerns. According to a 2019 study conducted by Pew Research Center, 6% of American households have already installed solar panels. Some 6% were already thinking about installing solar panels.
According to the study, the U.S. Energy Information Administration noted that solar power generated a very small 2% of America’s total electricity consumption from October to September 2019. This is compared to 37% consumption of natural gas and 25% consumption of coal.
By using solar power, you are assured of cutting your electricity consumption, lowering your electricity bills. You do not only get to save. You also get to save the environment.
- Buy only what you need.
During the pre-pandemic days when things were more comfortable, families were used to splurging on groceries, food deliveries, and online shopping. Now that things are more difficult, it would help to focus on the things you need at home.
Set your priorities, and allot the budget to the more important things like paying for your Internet connection, investing in the things you need for your remote work or online class. Limit your online shopping no matter how tempting it is. If possible, delete the applications on your phone to avoid being tempted to add them to your cart.
- Allot a portion of your salary to savings before even allotting them to your expenses.
Sometimes, we get anxious seeing our tons of bills to pay that we forget to save some in our banks. Financial experts say that it is more effective if you save a small portion of your savings right away upon getting your pay. What will be left will be the amount allotted for bills and other payable. With this, you get to make sure that you have saved some amount every payday, no matter how small.
Everyone went through a hard time during this pandemic. But now that things are getting better and jobs are becoming more stable, it would be wise to learn how to manage our finances. So when another pandemic or any emergency hits us hard, we are more prepared and financially ready. Our savings don’t have to be big. It just has to start somewhere.
Meta title: How to Be Money-Wise After the Pandemic
meta desc: Did your family struggle financially during the pandemic? Don’t worry. You are not alone. Here’s how to learn from the pandemic struggles and be financially ready next time.