There are many ways in which the pandemic has changed the way we should approach our finances. After all, many people lost their job security, had to live off savings or off government help, had major health expenses, and simply faced incredible instability. Trying to manage your finances in the same way is optimistic at best.
But how else should you manage your finances? It is all-too-easy to feel that uncertainty is the only thing you can be certain about, and that no matter how much you plan, anything can happen. And while there is merit to this, the truth behind it should be used to find a better way to approach money.
To help you look at your financial reality more clearly, here are some of the things you need to know about managing money in a post-pandemic world.
Find out what you own
Do you know how much your possessions are worth? If you are like most Americans, the answer is no. For homeowners, the question may not seem so important. Their possessions are covered by homeowners insurance, and the value of their home is at the forefront of their minds.
But for people renting, knowing the worth of your possessions is crucial. The average value of household contents differs depending on who you are. Obviously, a student will have far fewer valuable possessions than someone working in a high-paying job. But even if you don’t think you own much, you might be surprised by the value of your possessions.
Just in order to get by in today’s world, you need a phone and laptop. Add to that all your clothing and grooming products and equipment, and you’ll have a fairly hefty sum. It is important you are aware of this so that you are ready to take care of your stuff.
Get renters insurance
Knowing the value of what you own will probably leave you feeling slightly overwhelmed if you do not have insurance. As a renter, you can easily and affordably get renters insurance to cover your possessions. In the same way a homeowner has insurance that covers everything within their home (except for their tenant’s property), renters insurance covers the possessions within your rented home.
The loss of your valuable possessions can leave you in dire straits, especially since we need some of them just to be able to study or work. This is not something you should leave up to fate.
Start seriously saving
It has always been wise to save money. But in a post-pandemic world, there is no excuse to choose not to have savings. If you are earning more than enough to make ends meet, you need to put a significant amount of your disposable income into savings. The pandemic has proven that the economy is not an unmovable monolith. We’ve seen countless Americans going broke because of medical bills (even with insurance).
Your savings may not be enough to get you through the next crisis. There is simply no way to plan for every eventuality, and few of us are earning enough to build up a cushion that will cover major expenses and last for months. However, it is past time that we all start putting away what we can.
Get your estate in order
No one likes thinking about their own mortality. However, the pandemic has shown us that we never know what is going to happen. Since most Americans do not have wills, hundreds of thousands of people have died without leaving instructions for their families to follow. This makes a particularly tough time even more difficult, with the potential for arguments and fights about funerals, inheritance, and more.
In a post-pandemic world, it is important to keep what will happen after you die in mind when approaching your finances. Are you leaving enough behind for your family? Will they know how to deal with your estate?
It is as good a time as any to write the necessary legal documents, like a will and power of attorney. You can do this with free online software these days, and you don’t have to worry about huge legal fees.
The post-pandemic world will be difficult to navigate in terms of finances. However, with a bit of foresight and care, you can put yourself in the best position to survive future crises.