Tips for Managing Finances During the Covid-19 Pandemic [Part 2]

 2. Make a Budget Plan

If you hear the words budget plan, it may seem simple and easy to do, but in fact, rarely do people manage to commit to completing their budget plan. Not a few people who decide to stop recording their expenses either because they are lazy or because they forget.

Taken from nypost.com

In fact, making a budget plan and recording your income and expenses on a regular basis will be very influential in managing your finances better. Not doing a budget plan and financial records will make you confused where your money goes when at the end of the month you run out of money.

Tips for making the maximum budget plan you can do by applying the 40%, 30%, 20% and 10% systems. This division means that 40% of your salary is allocated for your basic daily needs for one month such as paying for housing, paying for electricity, or for eating. Then, 30% of your salary you can save or invest. This savings will be useful for you in dealing with unexpected risks, especially in a pandemic situation like today. Furthermore, you can enjoy this 20% salary for your own personal enjoyment, such as watching movies, hanging out with friends, and so on.

Try not to mess around with funds for your primary needs. Finally, 10% of your income you can channel to charity or help the people around you. Of course, this division is not absolute. You are of course the most knowledgeable about your personal financial management. Financial management is the activity of planning, managing, storing, and controlling the funds and assets that you own. So, you can change the percentage above according to your needs.

 3. Prepare an Emergency Fund

 As the name implies, you can use emergency funds to deal with emergencies that befall you, one of which is the COVID-19 pandemic. An emergency fund is an important thing for everyone to have. In addition to dealing with a pandemic, you can use emergency funds in other urgent situations. Having an emergency fund will certainly save you and your family's economic stability if unexpected bad things happen.

The amount of emergency funds that you must prepare varies according to your monthly income and needs. Generally, an emergency fund for those of you who are not married is at least six times your monthly expenses. If you are married but do not have children, you need at least nine times your monthly expenses. And when you are married and have children, it is recommended that you prepare funds at least twelve times your monthly expenses. This emergency fund should be available at this time of uncertainty to cover unexpected costs for you.

So many financial lessons that you can apply to deal with the current pandemic situation. From now on, you must be smart in managing your finances so that you can be calm when facing situations like this.