Rules for financial plan during COVID-19 – Part 2
It is best to be patient and not take financial decision based on fear. This step is extremely crucial, especially if you have made any long-term investments. Instead of breaking into those funds, it’s best to ride out the waiting period. The investments are expected to pick up once normalcy returns.
•Reduce the habit of baling out family, friends and church members
I am sure almost all of us got distress calls from everywhere with tales of woe. Some legitimately emptied an account for loved ones. However, it is not right because when faced with challenging times, a rule of thumb is that it’s a wrong time to become mother Christmas! It is also advisable not to give in to emotional blackmailers – relations or church members. If you must, give part of what they asked for that you can readily afford. Don’t try to be Superhero by picking the entire bill and regretting later.
•Guard your Health
In these times of a global pandemic, your health has never been more important. Thus, you must take proper care of yourself. Stay at home, self-isolate and observe expert advice. At the same time, please also get your healthcare properly insured. This reduces your out of pocket expenses in the event of emergencies and checkups.
•Keep enough liquidity to meet urgent needs
We all saw the way people flooded the banks at the end of the first lockdown on Monday the 4th of May, 2020. In times of emergency like this, you must have enough liquidity to meet your daily requirements. Thus, it is advisable to keep your money in such instruments that can be easily liquidated. Even while budgeting, always set out an amount that you can use should the lockdown be extended.
What more can you do?
a) Set up or Boost your emergency fund
Having emergency savings is crucial at all times, but it’s especially important during periods like this, when unemployment is rampant and economic uncertainty abounds. A solid emergency fund is one with enough money to cover three to six months of essential living expenses, and right now, it certainly wouldn’t hurt to hit the higher end of that range – 9 to 12 months. If you’re still working, use your paycheck to pad your savings
b) Leave your stock portfolio alone
The stock market has been swinging lately, and while it may be tempting to cash out investments to avoid further losses, doing so will only lock in any losses you’re already looking at. Rather than go that route, remind yourself that if you sit back and ride things out, the stock market is likely to recover in time. That said, you don’t have to leave your stock portfolio alone if what you’re doing is buying more stocks. Now’s a great time to invest in quality companies whose stock is on sale, so if you’re good on the emergency savings front, you can use your spare cash to add to or diversify your portfolio.
c) If you are still working, keep putting money away for retirement
When the prospect of unemployment looms over you, you may not give a hoot about what your finances will look like 20, 30, or 40 years from now. But just as now’s a good time to add to your stock portfolio, so too is it a good time to keep funding your retirement fund with PFA, provided you’re financially able to do so.
d) Those of us who are young may consider getting recession proof jobs
Job seekers should avoid careers in the service, gift and travel industries for now. They are often hard hit following market downturns as people tighten up spending. So pick an industry like healthcare or food industry. Make yourself a valuable asset where you work in other to minimize your chances of being laid off.
e) Protect yourself from Financial Fraud
You should always protect yourself from financial fraud, especially during a period of uncertainty. Unfortunately, fraudsters will prey on consumers’ fears and misinformation at this time. You may get phone calls, emails and texts to invest for quick returns. Be very cautious about them. If in doubt, follow your doubt. If tempted, seek a second or third opinion.
Here are a few things to consider in order to protect yourself from financial fraud:
• never click on links or attachments in unsolicited or suspicious emails
• never give out your personal or financial information by email or text
• Never share your ATM Pin with anyone including husband, kids, domestic helps etc.
• note that financial institutions will never ask you to provide personal, login or account information by phone, text or email
• when banking online, enter your financial institution’s website address in your browser yourself.
• Beware of questionable offers related to doubling of money or freebies. if it seems too good to be true, it probably is not true.
f) Write your will and appoint an administrator of your estate
I know that most of us don’t like this but trust me some lawyers in the house will confirm that there has been a big surge in Will-writing since the outbreak of Coronavirus. Writing a Will is one of those things that few of us want to think about, but having one can be incredibly reassuring at the best of times, let alone under the current circumstances. It allows the person writing the Will to express their wishes, and to make provision for those who they support after their death.
g) It’s time to Improve your streams of income
You can supplement your main income by taking on a side hustle or two. You would be shocked that the younger generations mainly live off the money they take in with side gigs and put away the majority of the main income. The more money there is coming in, the more you will be able to save. Plus, if you find yourself unemployed, you have an income to fall back on and a little extra in your savings to help you get by.
1. Your side hustle may be to grow your own foods like backyard vegetable gardening, horticulture if you have green fingers, floral arrangements, decluttering business (that means they pay you to come and remove clutters from homes, garages or offices etc.)
2. Be a part time caterer/ food vendor – talk to busy or young men and women and cook for them and dispatch or they pick up or you become a private chef – catering for private people in their homes or events.
3. Become an entrepreneur – by producing things that are needed e.g. foods, healthcare products: borrow from family and friends, and use your savings if any. Take CBN COVID19 loans.
4. Become a freelancer – doing stuff you like e.g. translations, interpretation, proof reading, story/scriptwriting, accounting, writing business/ financial plans etc. Here are some great freelance websites – Fiverr, peopleperhour, designCrowd, writerAccessetc
Finally, and most importantly, support your financial plans with spiritual cover. Prayer is key in all our dealings. Psalm 91 for instance is so apt now, so having done your part, put everything and everyone you care for in God’s able hands and you are safe even without a kobo. Let your moto in these interesting times be the Serenity prayer – “God grant me the serenity to accept the things I cannot change; courage to change the things I can and wisdom to know the difference. Live one day at a time enjoying every moment.”Say healthy, stay safe! Remember: surviving the pandemic in sound mind is probably the greatest achievement anyone can make this period.
EgbunaPhD, is an economist and author. She wrote in from email@example.com