Fail to plan, plan to fail.

The saying goes about right quite literally. As for finance, it is indeed necessary to plan ahead of time so that you can manage your finances accordingly.

And the pandemic was a wake-up call for all those who didn’t take their finances and planning seriously. Planning for retirement, insurance, savings, long-term investments, home expenditures, estate planning, etc., is necessary. You cannot expect to achieve a set goal without a proper plan.

Although you may have heard of people being sceptic about the concept of planning; the reason being there is no point as you never know what the future beholds. That is the very reason you should have a plan.

For instance, the pandemic saw the death of many people and nobody saw the emergence of a world pandemic. It affected so many families, on a personal and financial level. The caretaker of the family is no more and therefore, without a plan, you don’t know your next steps.

But we’ve also found a way to understand these sceptics. For example, lockdowns over lockdowns followed in the UK, just like in other countries. Several people lost their jobs. Businesses were shut down. The stock market faced immense turbulence. So, how can you expect to roll your plans into effect in such an environment?

Let’s talk about another example here.

Soon after about a year, vaccination drives were rolled out. The economy started catching up. Stocks began to pick up. The leading markets that faced immense downfall made gains towards the end of 2020.

Therefore, the basics of financial planning remain unchanged, despite the global pandemic. What you never thought would happen can happen; what you thought would happen, may not happen. So, what’s the solution to face the unknown? MAKING PLANS!

However, we do agree and understand that there may be minor shortcomings or backfiring of your plans. Nevertheless, with a plan in base, you get the idea of your next steps.

Here are three lessons that the pandemic has taught each one of us and we should implement them right away.

1. Always save aside a larger amount in your emergency cash reserve

Although an emergency fund may seem boring, time-consuming and pointless, the reason why you keep hearing about it is because it is important for financial preparedness. Many people fail to understand its importance until they fall into situations that speak otherwise.

Unfortunate and unexpected deaths during COVID-19 and the unstable economy are real-life reminders of the uncertainty of life. That’s why it is essential to have an emergency cash reserve so that it can help you at times unforeseen times of need.

In general, it’s good to have savings for three to six months from your expenses. You can save that money in an easily accessible account, like a high-interest savings account. However, if you’re one of the victims of losses to the pandemic, learn the lesson and make better plans accordingly. For example, instead of three to six months, you can plan to save up to 12 to 15 months to make sense of your financial situation.

2. Understand your investments well

It’s a basic sense – know your investments before even you make them. But reiterating the heat of the matter, understand where and why you’re investing. Learn about your asset allocations and the risks associated with your investments. Also, you cannot always expect big gains when it comes to returns on your investments. What goes down can come up and vice versa.

What’s important is that your financial goals remain intact and you’re able to manage your risks according to those goals. And if you aren’t sure about where to invest or should you invest, it’s always better to consult a professional finance person to conduct an asset allocation review. It’s better to spend a small amount to save you from probable risks than to jump into the cave and lose everything.

3. Financial planning comes to your rescue

This is the bottom line of the first two lessons which is also a lesson in itself. Why? Get this:

With financial planning, you gain control over the next steps of a crisis. Since you get a comprehensive look at your financial situation, you can set your goals and achieve an ideal financial future. Such an approach to a planned future not only saves you a lot of time and trouble but also secures your family’s life in case you won’t be around anymore - as we all agree with the uncertainty of the future!

The Bottom Line

Life is uncertain. As much as we hate the idea of talking or even thinking of death, it is only wise to plan for it – so that you won’t face the terrible consequences that come after!

While the pandemic was undeniably a massive challenge to one and all, it has also pushed us to gain a little perspective and look at things from a different view.

The pandemic made us all realise that with proper plans, you can hold your strengths against a crisis. You’ll have a set process to manage your finances, make adjustments to suit your situation and keep yourself on track for your goals and overall financial well-being.

With such financial lessons from the pandemic, you can get inspired to make changes in your finances to pave the way for a healthy financial situation in the long run.