Rules for the financial plan during COVID-19 | The Guardian Nigeria News

It is a statement of fact that we have all found ourselves in uncharted territory in all aspects of our lives today. The COVID-19 outbreak as a global health emergency has pushed most countries, states and cities to varying degrees of lockdown. Companies are either at a standstill or trying to manage their operations as well as possible thanks to widespread digital media. People now cover their faces and maintain a social distance. Instead of pursuing business and financial goals, the focus is now on maintaining good health and being careful to contain the spread of the coronavirus. In these times of crisis, it becomes more imperative than ever to take care of your financial health as well.

Why? Well, for the simple reason that the pandemic has hurt most individual income, bank balances, and cash flow prospects. For example, if you are a young person, now you are forced to ask yourself if you can still take care of your daily needs, find a job, buy a car, get married as you dreamed of, etc.

As a dad or mom, can you still feed your kids, pay the bills, maintain a lifestyle, and save money for rainy days? Is your job safe? Would you be able to run your business? Is your industry still relevant? Have you already spent your savings? Are you reducing your staff, changing operations, etc.? As a retiree, you know that low interest rates have set in, so your fund account income has been eroded. As a fixed income earner, inflation has wiped out your savings and the value of your stocks as we speak! No one is spared!

So the question is what are you doing? My overly simple answer is that it’s time to put in place an achievable and SMART personal financial plan.

Let me start by defining or describing personal financial planning – this usually involves creating a personal budget, planning taxes, setting up a savings account, setting up an emergency fund or crazy money and developing a debt management and / or recovery plan. Here are some simple ways we can all address the growing personal financial concerns in this time of crisis. Let me quickly add that in the future we would be wise to cultivate financial planning habits as they stabilize us in good times as well as in bad times.

Prioritize and review your financial goals
Take the time to review and prioritize your financial goals. Since business activities were slowed down or stopped, this would impact your income, which in turn would put pressure on monthly budget, insurance premiums, investments and increase the number of people asking you to ugly. Most people have had to smash their savings funds to deal with these critical emergencies. Your financial goals should therefore be realigned to overcome this global crisis. Some points you should look at: –

1. Inventory – Take stock of what you have – starting with your pantry, store, and bathroom cabinets. If you have what you think is enough food, toiletries, and medicine, then don’t buy more. You may need cash and some may expire on your shelves.

2. Spending – Your spending habits must have changed as a result of “stay at home” commands. For example, buying aso ebi has been put on hold while buying food in bulk is now beneficial etc., but many of your fixed expenses have not gone away. Now might be a great time to take a close look at your expenses and understand what they really are. You can also identify the most important expenses and those that could be reduced or eliminated entirely. In short, demonstrate self-control; don’t give in to unnecessary or impulsive spending.

3. Income – With the cessation of operations, many companies layoffs or reduce wages. If you are retired and living off your portfolio, dividends are likely to be reduced and interest rates have already fallen sharply.

4. The way we do our banking – most of the older people among us had money in our accounts but could not access the funds immediately after the lockdowns because they had not improved their banking habits. They didn’t have ATM cards; weren’t doing mobile online banking, so they got stuck. May I respectfully suggest that you improve your banking skills and maintain a good relationship with your account manager!

5. Debt – With interest rates at historically low levels, you should explore the possibility of refinancing any debt you have. The mortgage market is a bit crazy right now, so refinancing can be difficult, but it’s worth exploring. It could help you with your cash flow at this critical time.

• Stop making decisions based on fear
The old adage “Patience is a virtue” couldn’t be more relevant in today’s situation. While nationwide closures can spark fear, please understand that nothing is permanent. Hard times, as they say, don’t last, but tough people! For the same purpose, try to act rationally as much as possible.

To be continued tomorrow.

Egbuna PhD, is an economist and author. She wrote from [email protected]