The pandemic forced us all to rethink (and rethink, and rethink) how we do almost everything. From finances to grocery shopping — everything seemed like it had to be overanalyzed. Now, as the pandemic recedes across the nation, it’s time to review things once again. Only this time, we’re focusing on the best money lessons learned over the past year or so. Here are a few:
The pandemic taught us that we must be flexible. That means crafting a budget that has wiggle room and is able to take some tough times. Take a look at what happened to your budget over the past year. How did it change? How did it stay the same? Make notes about what you could’ve done better and implement those moves going forward. Keep in mind that as life returns to normal, you might be tempted to spend more and reduce savings. Try to avoid that switch. Keep reviewing your budget and make changes as necessary. The pandemic taught us that our budget is not a static thing — it must be nimble; ready to change at the drop of a hat.
Your investments, just like your budget, should be flexible. As US News reports, consider your risk levels as the world returns to normal. Are your investments at a risk level that you can sustain over time? Have you taken time to rebalance as the markets have soared? (If not, it’s time.) Remember to reevaluate your risk as life goes forward.
Emergency Funds are Vital
You’ve always known how important it is to have an emergency fund. Chances are the pandemic stressed that lesson even more. If the pandemic drained your emergency fund, it’s time to get it back up. If you never had an emergency fund, open a new savings account specifically for this purpose. Start saving as much as you can — even if it’s just $20 a month. Your goal is to save between three and six months of expenses.
Article was originally posted by Chris O'Shea on savvymoney.com