As many Americans work on recovering from the pandemic, a large majority are still feeling the effects left behind. According to a survey conducted by Pew Research, 44% of participants who indicated their financial situation worsened during the pandemic predict it will take three years or more to get back to where they were financially before the pandemic. When businesses closed or reduced their business hours, many Americans were left with a reduced income and had to rely on other avenues for cash. As we look back at how things were a year ago, here are some financial takeaways from pandemic.
1. Build up an emergency savings funds.
Emergency funds are designed to help families during a financial hardship like the pandemic. In the event that you experience a disruption to your finances and need financial assistance, these funds can provide immediate temporary relief. Your emergency savings fund helps you create a financial buffer and can keep you financially afloat.
Need help starting or rebuilding your emergency fund? Read Starting Your Emergency Savings Fund.
2. Know what is going in and coming out of your bank account.
Knowing your finances is critical during a financial hardship. Having an understanding of what comes out and goes into your account can help you better assess your financial situation. During the pandemic, job loss and financial strain left Americans assessing how they spend their money and on what. Paying for basic necessities like housing and food became difficult. Staying in touch with your finances with the First Bank On The Go mobile app can help you identify opportunities for saving and adding additional money to emergency savings fund.
3. Diversify your portfolio.
Diversifying your portfolio helps reduce the chance for unwanted risk. Instead of investing in one company or industry, diversify your portfolio by spreading out your investments across multiple companies or industries. This can help maximize your returns, as each company or industry will react differently to a certain event. For more information on diversification and diversifying your investments, please contact First Bank Wealth Management.
As you look ahead and work on recovering from the pandemic, it’s ideal to consider establishing a budget to gain a better understanding of what you’re spending your money on each month. Identifying extra areas for saving can help you allocate additional money towards your emergency fund. Diversifying your investment portfolio can help reduce the risk of unwanted financial loss. When a financial emergency occurs, it’s critical your finances are positioned to withstand the crisis. For more information on how our products or services can benefit you, contact a trusted First Bank representative.