The COVID-19 pandemic has left many people financially troubled after many months. Even if you've been lucky enough to remain above water, the subject of economic devastation is likely at the forefront of your mind. Not many people have the kind of savings prepared to make it through a pandemic completely unscathed with many more having little to no savings at all. Even when COVID is a thing of the past, the possibility of a next outbreak will still be there eventually. To safeguard your future against it, here are four financial planning tips to prep for a pandemic.
1. Start Your Financial Planning Early
The earlier you start financial planning, the better things turn out. That means that the earlier you start preparing your emergency fund and pandemic plans, the more effective your efforts to deal with an outbreak's effect on your own life will be. In fact, your planning will be most effective starting at this moment assuming you have the money and time to do so. A major part of pandemic prep will be saving money, so it just stands to reason that building your fund for longer will leave you with more on hand in the event of a disaster.
2. Assess Your Spending
As stated, much of pandemic prepping financially will be finding ways to save some extra money. While you find new avenues to save you may not have considered before, it can be beneficial to examine how you're spending your money as you have it now. Even if you've already trimmed the fat and stay away from reckless or binge purchasing, there could still be areas you might not have noticed before where you can cut down costs. Whether or not you find anything will be largely individual, but taking this as a chance to dig into your personal finances is also a good step in ensuring you budget and save properly as part of your plan.
3. Stock Up Responsibly
Many people associate the current pandemic with empty shelves and fighting for supplies. Understandably, you probably think that means that your best option will be to buy up all of your supplies once things settle down so you won't be competing for it later. This is partly correct but has the potential for a lot of harm, both for you and others. For one, while grabbing essential, non-perishable goods like paper towels, masks, gloves, and the like can be good when they're cheap and available, buying far too much in an attempt to be prepared can run you a lot of money and cause a shortage in the short term. If you're planning ahead during your shopping, your best bet is to buy enough to ensure you'll be comfortable in the event something goes wrong, but don't break the bank or over-stuff your house before anything even happens.
4. Review Policy Statements and Investments
If you have any investments or assets like retirement policies, reviewing the details of these will be helpful in understanding your financial situation and in planning for a pandemic in the future. For instance, some people have made the tough decision to withdraw money from their 401(k)s during COVID, a process that could come with penalties and will certainly call for adjusting retirement schedules as a result. While you can't tell the future, understanding the specifics of these policies, what it could mean if you make decisions like withdrawing from your retirement fund, and similar knowledge will leave you in a better and more educated position when things turn sour.
While we all want the current pandemic to end, it's worth remembering that another one could easily happen in the future. Protect that future by preparing early with these four financial planning tips you may find helpful.