The world is going through not one, but two pandemics: one is the COVID-19 health pandemic, and the second is a pandemic of financial anxiety.
Although these two pandemics are interrelated, they are not the same. The first one is affecting our lives, and the second one is depleting our life savings. The second pandemic is a direct by-product of the first pandemic, but over time, with business closures, soaring unemployment, and loss of income, this financial anxiety has taken a life of its own.
Learning to cope with this financial anxiety to effectively manage your financial situation is the need of the hour. Try these tips to get started:
1) Manage Your Mental Health
It’s impossible right now not to worry about money. The sudden unemployment, disruption in routine, and the uncertainty of the future can cause financial anxiety even in the strongest of minds. So, the best you can during this stressful time is to manage your mental health. Follow these steps for better mental well-being:
a) Take good care of self
Eat healthy food and sleep on time. A healthy mind and body will give you the energy to deal with the financial problems that you are facing right now.
b) Practice healthy coping skills
Going to the gym or having coffee with your friends could have been your go-to coping strategies, but they aren’t available to you now. So, you need to identify the alternatives. Experiment with various coping strategies like video chatting with friends or using meditation apps, until you discover the one that works best for you.
c) Be physically active
Walking, strength training and yoga are a few ways you might get some physical activity right now. Many fitness trainers are offering online classes that teach you exercises meant to be done at home with little or no equipment. Take advantage of these training programs.
d) Use your support system
If your financial anxiety is too much for you to handle, share your concerns with trusted family and friends. Talking to your loved ones will make you feel less isolated and less stressed. They may even be able to provide a new perspective on the situation and help you find ways to get your financial issues under control.
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2) Prioritize Your Payments
You may not have enough money to make all the payments. So, you need to prioritize which bills need your immediate attention. Firstly, take care of your basic needs. If you need to pay rent, speak to your landlord if he/she is okay with you deferring the payment until you get back on track with your finances. If you have a home loan instalment or credit card bills to pay, talk to your bank/provider, if you can delay the payment without you incurring any interest or late fees.
Some governments have rolled out relief programs that allow banks, credit cards and other financial institutions to offer assistance. They may allow you to defer payments, forgo late fees, or allow you to pay less.
3) Find Alternative Sources of Income
We are not sure for how long this pandemic will last. So, find ways to increase your income.
You can put your skills, such as editing, writing, graphic designing, etc. to use here. Begin looking for projects online where you can use your skills to earn extra money.
4) Get a Loan for Emergencies
If your emergency fund has been wiped out, and your savings are depleting, consider applying for a loan. Check with private online lenders if they can offer you a personal loan, small business loan or a personal line of credit at favourable terms to help you deal with the emergency.
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About the author:
Shiv Nanda is a financial analyst who currently lives in Bangalore (refusing to acknowledge the name change) and works with MoneyTap. Shiv is a true finance geek, and his friends love that. They always rely on him for advice on their investment choices, budgeting skills, personal financial matters and when they want to get a loan. He has made it his life’s mission to help and educate people on various financial topics, so email him your questions at firstname.lastname@example.org.