4 Ways to Be Financially Better After The Economic Pause

4 Ways to Be Financially Better After The Economic Pause

May 05, 2020

The states are gradually starting to encourage businesses to open up again after being shut down for more than six weeks amid the Covid-19 pandemic. Many people, however, still have a lighter work week and can use the time to work on self-improvement. My hope, as an advisor, is that people can come out on the other side of this "Great Pause" financially better than they entered it.  

Here are four ways to ensure you come out on the other side of this pandemic financially better:

Rework or Create a Budget

If you have a budget, now is a great time to rework your budget. If you don't have one because you didn't have time to create one, go ahead and get started! After reworking my budget, I discovered extra cash in the "automobile fuel" category. I've also saved money, making tea and coffee from home. Gas prices have dropped and will likely stay that way for a while until consumers can thin-down the fuel surplus. Be wide in using your "pandemic" financial surplus.

Don't Run Up Your Credit Cards

If you are bored, don't seek excitement by shopping on Amazon®. Recently, a woman shared with me that because she was bored, she found herself ordering a lot of food takeout and deliveries. Lowering your credit card debt or trying not to do additional damage (perhaps because your cashflow has changed) should be at the forefront of your mind. To combat boredom, try making meals at home with your family or scroll social media pages for new recipes. Everyone's becoming a chef now that they have time on their hands and love sharing their recipes.

Discover Your Spending Weaknesses

Go through your bank card/ credit card statements and find the one thing (outside of utilities) that sticks out. What are you spending the bulk of your money on each month that can be eliminated? These one or two items could be a spending weakness for you. Ask yourself, why are you spending so much money on the one item. Is it something that you can give up or cut back the frequency of purchasing the item.

Apply the S.I.D. Approach to Disposable Cash

Once you've reworked your budget and discovered extra money(because gas is less and you're not moving your car), use the S.I.D (Save, Invest, and Tackle Debt) approach to help you build wealth. Saving, investing, and tackling debt is in no particular order. If you've funded an emergency fund and your cash reserves are in order, then tackle debt and invest your disposable cash. When I reworked my budget, I didn't need to add any money to my savings account, so I used my disposable cash and made a principal payment on my car and invested in a few shares of stock (invest and tackle debt). Each time you work your budget, and there's leftover money after all other expenses and personal allowances have been accounted for, ask yourself, "Where can I save, invest, and cover and debt with this money. Investing could be that you pour the money back into your business or invest in your mutual fund account.

The "Great Pause" of Covid-19 is rare, but we can find good in all situations. The pause gave us time to slow down. Use your remaining time to work on your personal finances, for we all know that this "pause" will pass.

About Terrell Dinkins, MBA, ChFC®, CDFA®

******************************************************************************

Terrell Dinkins, MBA, ChFC®, CDFA® is an investment adviser representative of and offers investment advisory services through OBN Wealth Advisors, LLC, a registered investment adviser offering advisory services in the State of Georgia and other jurisdictions where registered or exempted. Main Office: 950 Eagles Landing Pkwy, Suite 216, Stockbridge, GA 30281. Tel: 404-723-9780. Website: OBN Wealth Advisors. Image from Pixabay.