Talk to anyone about money right now and you will probably hear the words: "My finances are in trouble." COVID-19 turned our world upside down in just a few weeks. Like millions, you may be wondering how to achieve financial freedom during a time like this.
So far, hundreds, if not thousands of businesses have closed shop. Millions of people have lost their income. And the most affected individuals are those who live from paycheck to paycheck. Experts warn that low-income earners who don't learn from this crisis may not achieve financial freedom.
Fortunately, during these uncertain times, most people find themselves wondering what they can do to better their future. No one wants to repeat the same mistake and learn the hard way again. If you're one of them, you're on the right track.
This crisis may have hit your wallet hard, but you can move forward wiser and come out stronger. We want you to succeed in your quest for financial freedom. So regardless of your financial health at the moment, here are four financial lessons from this crisis.
Don't Be Overconfident
Before the crisis, everything seemed fine. The market was doing so well that most economists said the rate of unemployment was at an all-time low. Many people were making financial decisions as if it will always be cakes and ale.
But everything changed without warning. Those who spent haphazardly saved less and accumulated debt find themselves in a difficult financial situation.
If you don't want that to happen again, be wiser when spending your money, especially when everything looks good. Don't base your finances on the job market because it can change at breakneck speed.
If you find a job or your hustle is bringing in some money, make hay while the sun shines. Overconfidence increases your chances of making poor financial decisions.
Emergency Funds Are A Must-Have
Over and over again, financial experts have reiterated the importance of emergency funds. They know emergencies can happen anytime. Those who save for these situations have some money to get them through difficult times.
Emergencies can be anything from job loss, major car breakdown, and more. Looking at the current crisis, people who set aside money for an emergency are more likely to weather this storm better than those who didn't. So save for emergency because it is not a question of "if" but "when" it will happen again.
Side Hustles Save
We know that during difficult economic times, people turn to the gig economy. Most of them get side hustles for various reasons, such as making more money, paying debts, saving for education, and more.
But what COVID-19 crisis has taught us is that apart from helping you meet your financial obligations, side gigs can also help you sail through difficult times. When you lose your main job or get laid off, you can still generate some income.
So it may be wise to get a side hustle to have another stream of income. You never know when it will save you.
Your Lifestyle Matters
Retirement savings, emergency funds, and debt-free living are all worth chasing. But to pursue these goals, you need a financial margin.
Being comfortable living from paycheck to paycheck won't get you there. But if you learn to maintain your existing lifestyle while your income increases, you can achieve these goals.
So if you've been competing with your friends, stop. You can't let peer-pressure and the number on your paycheck to determine how you spend your money.
COVID-19 may have hit you hard financially but you can make lemonades from it. As you pursue financial freedom, keep these lessons in mind. What other lessons have you learned from this crisis? Let us know how you are achieving financial freedom by visiting