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4 ways to make the most of your pandemic savings

25.04.21 23:07
Motley Fool

The coronavirus pandemic has left millions of Americans unemployed and many households have struggled with lost income in the past 12 months. On the flip side, however, are the people whose finances have improved over the course of the pandemic.

Between business stimulus checks, remote working and canceled social grants, many people are now saving more than ever before. If you’re in this boat, here’s how you can get the most out of your money.

1. Start or increase your emergency fund

If there is one thing the pandemic taught us, it is that you never know when a financial emergency will arise. That’s why it’s important to have an official emergency fund – money to get you through a period of unemployment or to cover unplanned expenses like medical bills, home repairs, or car repairs.

How much money you need for emergencies depends on your living conditions and your level of comfort. If you don’t own a house or a car, have no children, and tend to accept unforeseen expenses, then you can be satisfied with spending three months in the bank. This is really the minimum that you should aim for. However, if you own a home and have a family to support, six months on the cost of living may be a more reasonable goal for you to save.

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