EDITOR, The Tribune
Businesses are closing, jobs are disappearing, and the global economy is shrinking. The coronavirus has had a negative effect on so many lives and so many wallets. Many of us have questions we need answered:
· Is this the beginning of a global recession, similar to the one experienced in 2008?
· How long will it take for the global economy to recover?
When it comes to surviving this financial crisis, the focus should be on situations that you can control rather than stressing over things that you can’t. Throughout this unprecedented time, your health should be a top priority, nonetheless, maintaining your financial health during this tumultuous period is also critically important. To deal with these difficult times, here are a few strategies that you and your family can implement to gain control of your money.
ACCESS YOUR CURRENT FINANCIAL STATUS
When was the last time you visited your personal physician? I hope that the answer is within at least a year period. However, when you went to your physician, you were probably getting an annual physical and through this process of an annual physical, the physician assessed your health. Well, the next question that I will ask is “When was the last time you assess your financial health?” It is important to note that your financial health can make or break you, especially during a time of uncertainty in the global economy.
By doing a financial “check-up” we are then able to determine what adjustments we need to make in our lives, from the amount we should be saving to the amount of expenses that we should be cutting back. Being aware is key.
CREATE A BUDGET
When it comes to your personal finances it’s best not to take much risk. You must be able to visualize and understand what are your expenses and how are you able to cover them while putting some income into savings.
· Write it down.
· Calculate your expenses.
· Determine your income.
· Set your savings and debt payoff goals.
Creating a budget will help you to keep your “eyes on the prize” as it assists you with figuring out your long-term goals and working towards them. Before creating a budget, identify your short and long term goals, write them down if you have to. Studies have shown that if you write down your goals you will have a greater chance of achieving them.
PREPARE TO CUTBACK ON NON-ESSENTIALS
Did you really need to purchase those concert tickets? When it pertains to lifestyle essentials, vacation, movies, restaurant visits, and spa treatments all come to mind. Those expenses sure do add up over the course of a month and can put a massive dent into your budget. By limiting yourself to focus on essential spending, it is possible to save a considerable amount of money each month. In order to do so, you must become mindful of your spending activity:
Write down your non-essentials with the associated cost.
Write down your essentials.
Remove the items that you cannot live without (essentials).
Whatever items are left, add them up.
You might be amazed of how frugal or non-frugal you are.
If you fall into the category of non-frugal, try using a “Value-Based Spending Method”. When you spend your money based on values, you feel better about what you purchase, after you have purchased it. Spending on your values will ensure that you use your money as a tool to achieve happiness. That being said, each of us are unique beings, and our values make up who we are and in turn, it dictates how we spend our time and our money.
In conclusion, the coronavirus has humbled and taught us some financial lessons that we preferred not to have learned, at least not now. But as we inch closer and closer to the “new” normal, perhaps the silver lining is, if we follow these simple steps during a time like this, we will be well-prepared to implement these strategies with a breeze in the new era of the new normal.
‘GET IN CONTROL OF YOUR MONEY TODAY!’
Accounting Student at The University of the West Indies
Progressive Young Liberal Member