The Coronavirus pandemic has resulted in two major crises; health and the economy!
While there are other ones, which can be added to the list, the above two are the ones, which are most affecting the global population. Most of the advanced developed nations of the world are looking at a severe bout of economic recession.
This means that jobs, livelihood opportunities, investments, and savings are coming under unprecedented pressure. While we look towards governments, it is very clear that they are not going to help us out.
This means that it is important for each one of us to be responsible for our health and finances. In this article, Dune Ventures helps us avoid the top financial mistakes we can make during the pandemic.
Top 5 Financial Mistakes to avoid during the Coronavirus Pandemic: The List
1. Lending money to near and dear ones
Lending money is one of the activities you should avoid at least during the time the pandemic lasts. All of us are suffering in varying degrees. You might not be suffering today, but you never know what tomorrow holds. You can get laid off when the company you work goes under.
This is why it is best that you give a stern ‘no’ to anyone, who asks you for financial help. The important thing is to protect your family during the crisis. You can rest assured that the money you lend is not going to be returned to you anytime soon. What are you going to do if you need it?
2. Using your Credit Card to cover expenditures
As a matter of financial principle, a credit card should only be used for emergencies. A credit card is the worst money tip anyone can give you. Do not try substituting your loss of income by maxing out your credit card. This is going to lead you into debt, and entail a future vicious cycle.
If you have lost your job, or your partner has, it is best to cut down on expenditures, rather than depend on your credit card. Do not try to engage in expenditures if you can easily avoid them. This is something that you should seriously pursue during the pandemic.
3. Not having a Savings or Emergency Fund
Do you know which kind of people has been the worst affected in financial terms during the pandemic? The answer is pretty simple- the ones who have never saved or created an emergency fund! Even the richest people in the world need a financial buffer.
This is why it is so important to create a savings fund to help you overcome an economic crisis. If you are looking for the best practices for savings, you should know that savings should comprise 25% of your monthly income. This will keep you tension free when something unforeseen comes up. This will also help you avoid loans with high-interest rates.
4. Avoiding talking to Financial Experts
When it comes to finances and economics, you should always know that an expert knows more than you. While many people tend to have a misconception of financial advisors, the reality is far from that. The best financial advisors can help you during such a financial crisis.
According to Dune Ventures, when it comes to savings, investing, liquidating assets, or even taking loans, financial experts can help you come up with the best solutions. Over time, you will realize that working with one was the best decision of your life.
5. Spending indiscriminately and thinking that things will get better immediately
If you have still not woken up to the fact that the economic effects of the COVID-19 pandemic is going to last till at least 2021, you should. Global financial experts, international banking institutions and national governments are all predicting that going back to pre-Coronavirus times is going to take a long time.
This is why you need to be prepared for such a long period, by saving up and cutting down on things, you do not need. Try to spend on articles, which are essentials and cannot be done without.
By avoiding the above-mentioned mistakes, you can hope to keep your finances in order during the pandemic. Many of the things are difficult to do, but as the proverb goes-, ‘tough times call for tough decisions’!
Can you think of some other financial mistakes we should avoid making during the crisis? Let us know in the comments section.