What can you do if you are living under financial uncertainty? Are you going to let yourself surrender to an “uncertainty” virus that cripples you from taking actions to increase your financial immune system? Or, you could take 6 defensive money actions to protect your finances when thrown into a time of financial uncertainty.

A duration of financial unpredictability may be traumatic for any person. Because of the current global Covid -19 pandemic, many across the globe are facing joblessness. Many others fear that they too could be the next victim. Such a situation can be overwhelming and stressful.

If you’re confronting a similar period of financial instability/uncertainty in your life, you can make the following six basic smart moves with your money to carry you through.

Money Action #1: Create a Financial Budget (if you don’t already have one)

  • Why is it important?

In a period of vulnerability because of a pandemic (as an example), planning your finances (budgeting) becomes more significant. It is not too late to create one if you have not started a budget before.

Many folks would find planning for the finances to be rigid. When you were a child, your parents may have told you, “We can’t simply get anything. We must spend within the budget.” From there on, we are quick to equate budgeting as an awful exercise, or just the thought of creating a budget implies you’re tight on cash. But that is certainly not true. A budget grants you the power to use your money. The budget tells you how you can best spend your hard-earned money, so a budget actually helps you to steer your money to the right destination.

  • How to create a budget

Choose a tool that best suits you to get going with planning. It can be a simple pen and paper, an Excel spreadsheet or a budgeting application.

First, note down all the money you’re expecting to get in the month. Second, identify your expenditures. This will involve fixed monthly costs such as rent or lease, taxes, benefits and minimum interest contributions, and variable (discretionary) expenditures such as shopping, dining out, entertainment, and petrol as examples. If you really don’t recognize the amount you can pay for any of these sections, review your recent bank account’s statements and analyse your expenses. From here, you can then determine if the number is too low, too high or just nice before adding to the budget.

Never forget to put a number on the savings section in your plan. Your income should be the same to the total money you’ve earmarked for out-going, whether it’s for expenditures or savings. Ensure your income is the sum of all the outgoings the budget allocates. If it is not, change the spending plan accordingly.

  • Tracking actual vs budget

A critical aspect of budgeting is the monitoring of the actual expenses. This way, relative to the plan, you will know your accomplishment to ensure you’re on target. Allocate Sunday night as your time to log all your weekly expenses so you can make some required changes if appropriate.

As a beginner, you most likely are not a budgeting expert. Truth be told, it takes around a few months to start the practice of planning. If the initial few months are not going as planned, that is all right. Take your recent knowledge and implement it in the subsequent month and continue onward.

Budgeting is an arrangement to manage your money wisely. Particularly during periods of instability and chaos, it’s essential to have an arrangement for your cash and understand your general financial well-being.

Money Action #2: Create or Grow Your Emergency/Backup Fund.

  • Why Is It Important?

If you do not know how your financial situation will be in the next few months, then it is crucial to maintain an emergency fund which acts as a safety harness keeping you afloat during terrible times. When something terrible fall upon you such as a job loss or facing a major unforeseen cost, it is there to save you.

  • How?

A standard target recommended by finance experts for your backup fund is to hold three months to a half year of daily living costs. If you feel your present backup stash would not be sufficient to get you through your preferred X number of months, then it’s an ideal opportunity to save more now.

You can determine your target savings for emergency funds by calculating your total monthly expenses. These expenses include, among others, rent or loan payments, taxes, health, essential food, and electricity. When you add that up in a month, multiply it by the quantity of months you choose to hold in the emergency fund.

Many common considerations determine the number of months of spending you would have to save up. It can vary based on income sources you have, the size of your family, whether you have a discretionary income, or if you are a tenant or property owner. Choose an amount that makes you feel secure and has peace of mind if faced with an emergency.

Money Action #3: Temporarily Stop Additional Debt Payments

  • Why is it important?

During the emergency time, cash is king! While in an uncertain situation, ensure your emergency fund meets the necessary amount to fulfil your needs. Otherwise, try your utmost to conserve as quickly as you can. One solution to grow the backup fund is…

  • How?

Stop paying off debts more than the minimum!

If you want to pay off your debt sooner, you need to pay more than the minimum amount. But, during this uncertain time, take into consideration that the level of your emergency fund may not be optimum.

If you are stressful during these uncertain times and you have to build more emergency funds, then it’s time to defer additional debt payments and focus on saving more instead. Nevertheless, it remains important to complete the minimum payment, but you now save any other extra debt payments you would have previously been making.

Once your funds are stable and saving extra money is no longer needed, you can easily recover and repay the debt. Of course, you would now have to pay more interest than you did had you paid more in advance, but the benefits are that you will have more cash in-hand to spend on necessities during difficult times….and better peace of mind.

Money Action #4: Stop Keeping Up With The Joneses (drop the unnecessary spending)

Dropping needless expenses is another means to add more funds to the emergency savings. Have a peek at your expenses budget to see what sort of stuff have you been wasting money on. This can include activities such as entertainment, dining out, holidays, attire, subscription services, and other treats.

During an uncertain time, taking those items off the budget, for now, may be helpful. This way, you will take the excess money that would have gone through these costs and add it directly to the emergency fund instead.

Money Action #5: Practice frugality (spend only on basic needs)

By eliminating any needless expenses, you will concentrate on what you actually need to fund each month in 4 basic needs of humans:

  • food,
  • water,
  • clothing, and
  • shelter.

Eliminate all additional expenses and concentrate on the above four basic needs in a case of real financial crisis which could last for years.

Make sure you are meeting the listed 4 basic needs. Consider slashing the cost of each if they are still relatively high. If you’re in a period of financial instability and can strongly foresee that you’re going towards financial disaster, concentrating on these 4 basic needs while leaving out your other financial “noise” and then throwing any spare penny into the emergency fund will be a big priority. This would ultimately be helpful to sustain you through the disaster.


Money Action #6: Get a part-time job or a side hustle

Whether you’re faced with a big sudden cost, losing your employment or worried that a layoff is imminent, you would be happy to take on any additional jobs. Now could be the best opportunity to pursue a side hustle or a part-time job to assist with revenue replacements.

Our planet is now in the midst of a pandemic. It’s clear the effect it had on our global economy. People, by the millions, have applied for unemployment since this period and are searching for further work. And frankly, it may seem very frightening. We are very sad for people who got upset during this extraordinary period. The positive thing is that, at this period, there are businesses out there searching for additional staffs in reaction to the covid-19 pandemic.


It’s natural to feel scared or overwhelmed during unpredictable periods. Rather than feeling uneasy over what could occur to your financial status, take these money actions to help build a strong financial base during an unstable financial time.


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So, are you taking any other financial precautions to protect your money? Do share with us your alternatives.