As the nation works to deal with the lasting economic impacts of the COVID-19 pandemic, many Americans across all generations have been working to keep a close eye on their financial health. That said, the post-disaster economic issues the nation is facing are vast and varied, and younger generations may currently be more concerned with the student loan debt crisis and the high cost of living while older generations may be watching inflation and determining how to recoup losses from their retirement accounts.

No matter what age you are or the generation you belong to, the market changes that have occurred over the last couple years may have had an impact on your thoughts about financial planning and preparation. In turn, you may also feel an increased need to get your finances in shape — and be ready to weather any future disasters. To help you feel more in control of your finances, Bankrate has compiled tips from experts for financial planning post-disaster.

What the experts say

Kristin Larsen, CEO, Believe In A Budget

“Something I’ve heard a lot in the last year is: ‘Wow, I didn’t realize I spent so much money on ____ until I couldn’t do it anymore!’ No matter your financial situation, you should regularly audit your expenses and see if there are areas for improvement.

That said, there comes a point where you can only cut expenses so much. If you’re barely breaking even every month and you have financial goals like funding an emergency fund, you need to find a way to increase your income. One of the best ways to generate money quickly is to lean on skills and knowledge you already have. If you feel like you don’t have monetizable skills or knowledge, it’s never too late to learn. That ‘little’ hobby or side hustle that brings in a few bucks here and there can be invaluable in the face of financial disaster.”

Laura Beaulieu, VP of Marketing, Billshark

“If you’ve never negotiated your bills — like your cable bill or internet bill — there’s a 90% chance that you’re overpaying. There’s room to negotiate with your providers. They would rather keep you as a customer than lose you to a competitor.”

Lindsay Bryan-Podvin, LMSW, Financial Therapist, Mind Money Balance

“Pad your emergency savings account… A lot of those little ‘whoops’ expenses are no longer there. You aren’t waiting in line at Target, throwing a couple of magazines into your shopping cart. You aren’t grabbing that coffee on the way to the office. You aren’t meeting up with friends for a drink and appetizers. Those types of expenses have effectively disappeared, decreasing a lot of extraneous spending and making it easier to save. I think for many people, the thought of ‘giving up’ some of those expenses pre-pandemic seemed impossible, but now, folks are seeing that it might not be as hard as they’d imagined to give them up.”

Kelan and Brittany Kline, Founders, The Savvy Couple

“In order to be prepared for the future financially, you need to have an emergency fund established. This could range anywhere between $1,000 to 3 to 6 months of your monthly income. This would allow you to continue to cover your monthly expenses while looking for another job or supplemental income. This will give you some peace of mind during an already stressful situation.

Another money-saving tip is to ask for a discount or negotiate what you are looking to purchase. The worst someone could say is no, but after the year that we had, everyone is looking to give grace to different situations.”

Tawnya Redding and Sebastian Rodrigues, Money Saved is Money Earned

“We’d recommend building your emergency savings up to six months of expenses eventually, but at least have something put away for a rainy day. No matter your level of income or liabilities, you must make savings a priority to ensure you can cover yourself in the case of financial hardship.”

Stephanie Nicolette, Resource Navigator, Family Reach

“Tips we have found helpful:

  • Explore what programs you might qualify for through your mortgage or utility companies. Call and ask what they might be offering for your current situation and if they can help.
  • Contact vendors or billing departments to see if you can set up an interest-free payment plan.
  • Ask your healthcare team for resources on a specific cost, such as parking at the hospital or meal vouchers.
  • Learn the laws that can help you and try to review policies that apply to you — such as regarding student loans.
  • Explore where you can cut costs or lower your expenses. This could include canceling subscriptions or memberships you aren’t using.”

Kevin Panitch, Founder, Just Start Investing

“The best way to save big chunks of money is to limit your expenses on housing and transportation. This is where most Americans spend the majority of their money and, therefore, where they have the most room to save, too.”

Kimberly Coleman, Mom in the City

“It is essential to keep track of where you are spending your money. My husband and I went through the expenses section of our budget line by line and eliminated any items that were not necessary. I did the same thing with my business financial plan. If any expense wasn’t directly or indirectly leading to profit, it was deleted.

Consider adding additional streams of income.”

Kelley Long, CPA/PFS, CFP®, Financial Coach, Wealthtender

“The objective in any financial disaster is to get through it with as little long-term damage to your financial picture as possible. So if you lost your income for a bit, trying to keep yourself in a place so that when you have income again, you’re not playing catch-up for months to come. That means a combination of having savings in place to pay bills while also doing your best to limit financial commitments that can’t be quickly paused or canceled if a future hardship arises.

Another place people get trapped is with payday loans, which can quickly drive you to bankruptcy. Before you resort to committing future paychecks to past expenses, work with your creditors and bills to see if you can pause payments or get a payment holiday. The faster you’re able to take your monthly expenses down when disaster strikes, the easier it will be to get through the disaster and recover quickly on the other side.”

Kristen Dillard, Director of Product Management. Quicken/Simplifi

“Pay yourself. It’s the age-old advice and one of the most important tips — don’t spend more than you make and save, save, save. You should always have an emergency fund, rainy day fund and retirement savings account. Don’t wait for money to be left over at the end of the month to sock away for your rainy day — pay yourself first. Ten percent is a good rule of thumb, but if you can’t scrape that together, start saving what you can. Setting up automatic contributions into your savings makes the task even easier… Virtually every financial institution gives you the option of having money automatically deducted from your checking account to your savings or investment account.”

Looking back on what we learned during the COVID-19 pandemic

If we take just one thing from the pandemic, it will probably be this: we need to be prepared for anything. The word “pandemic” is typically associated with health crises, so the economic impacts that resulted from the COVID-19 pandemic were surprising to many. In addition, very few people were prepared for the world to shut down, even temporarily, and as a nation, we were not prepared for widespread job loss, the huge strain on our healthcare industry, or supply chain issues and the resulting inflation. We were also not prepared to handle loss of revenue from travel bans, the ramifications of widespread school closures or the high volume of extensive unemployment claims.

In addition, no one could have predicted such a shift would be made toward existing technology to connect us virtually across cities, states and countries during the crisis. We also welcomed a move to a new era in the workplace, which expanded employee flexibility and advanced the shift toward a remote work environment for numerous industries. While this created a ripple that resulted in both positive and negative outcomes, we continue adjusting to a “new normal” by taking it one change at a time. The silver lining is that many people have started to put more thought into preparing for life’s what-ifs. Now, we know that even if something seems extremely unlikely to happen, we should be ready for it.

Most common financial hardships during the pandemic

The pandemic brought about a broad range of financial challenges. Many families experienced hardships like never before. Here are a few of the most common hurdles families have had to navigate since 2020.

  • Job loss. As 2020 wrapped up, we saw more than 22 million jobs lost because of the pandemic — and it could take years for unemployment numbers to drop back down to pre-pandemic levels. Specific industries like restaurants, hospitality and live events have been particularly hard hit. If you were one of the millions of Americans laid off during this disaster, you have probably felt some enormous financial strain. We can now see the light at the end of the tunnel.

    As of summer 2022, the whole of the nation’s economy had reversed the 25 million jobs lost during the pandemic. While that is a positive start, job loss is still a major issue in areas across the country, and it could take a few more years before some areas regain the jobs lost during the pandemic. However, the nationwide shift toward remote work means that some states are now benefiting from the tax benefits of cross-state employment, while the warehousing and transportation industries have been booming due to the increased demand for online shopping. As the economy continues to bounce back, you have the opportunity to explore new roles and industries.

  • Reduced hours. While some lost their jobs entirely, many saw their hours reduced. The data for reduced hours is hard to track, but we can safely say that many across the country felt the sting of fewer hours — and the resulting reduction in income. If you saw your hours slashed during the pandemic, you may have considered exploring a side job. Countless Americans now have a side hustle, which can help you bring in as much as $8,000 annually on average.
  • Loss of childcare. Pandemic-related disruptions in childcare accounted for a whopping $1 billion in annual losses. With schools closed, many parents felt the strain of figuring out how to keep their kids safe and focused on their remote schooling while juggling their job responsibilities. In fact, 700,000 parents quit their jobs to care for their children. Fortunately, 98% of public schools had reopened for in-person instruction as of June 2022.
  • Business closures. Both employees and business owners suffered during the height of the pandemic. Nearly 100,000 businesses permanently closed because of COVID-19 and its variants. Unfortunately, labor shortages and increased inflation are still hurting both large and small businesses that were already vulnerable from the pandemic. A silver lining is that many business owners have become more flexible and applied lessons learned from the pandemic to their current business models to become more prepared.
  • Inability to pay mortgage or rent. 15 percent of adult renters (an estimated 10.7 million adults) were not caught up on rent, with about 9.5 million not caught up on mortgage payments, as of March 2021. While many areas implemented programs when the pandemic hit to forestall eviction or temporarily pause rent and mortgage payments, many of those programs have ended. As housing prices increased, many first-time home buyers were priced out of purchasing a home, and in turn, there were high increases in rental costs in most markets. In fact, rent in some areas has increased by over 18% since 2021, and many Americans are still behind on payments. If you are renting or have a mortgage and are still unemployed or struggling financially, try reaching out to your creditor to see if you can work out a payment plan.

Clearly, Americans were hit hard from virtually every side in the last few years. Ultimately, it highlights just how important it is to financially plan for life’s what-ifs.

How to be better prepared in the future

After a financially challenging year, you probably want to do everything you can to pad your savings to be better prepared for a future disaster. As this pandemic showed us, we can neither predict what the future will bring nor the scale of difficulties we may face.

Proper financial planning can make all the difference in not just your bank account balances but also in your mental wellbeing. Based on the expertise from the financial planners with whom we spoke and guidance from recognized organizations, here are three things you can do to be better prepared in the future.

Build your emergency fund.

Nearly every single one of the financial planning experts with whom we spoke mentioned an emergency fund. This is essentially a rainy-day fund, the money you put away for expected situations, like, say, a global public health crisis that shuts down pretty much everything.

Experts say you should aim to have between three and six months of expenses in your emergency savings. That may seem like a daunting amount, but you can start small and slowly build your account over time. We have some tips to help you get started.

Review your budget and spending

Many of the family financial planning experts we interviewed for this piece said they helped clients get control of their budget in the last year by carefully reviewing it. To start, set aside some time to go line-by-line through your bank and credit card statements from the last few months. This can help you identify trends and potential places to save. Some of our subject matter experts said they had clients who were surprised to find they were still paying for a subscription they thought they had canceled, for example.

Once you better understand your spending habits, you will be in a much stronger position to build a budget that actually works for your lifestyle. We have several resources you can leverage here:

Evaluate your insurance policies

Insurance exists to financially protect policyholders against losses in the event of a covered accident, disaster or other catastrophic event. Evaluating your insurance policies can be a helpful part of your regular financial planning. Your needs may change over time, and it’s important to ensure you still have the right coverage for your individual situation. In general, it can make sense to evaluate the following insurance policies:

  • Auto insurance: It may benefit you to make sure that your policy covers your vehicle and any passengers in the event of an accident. You may also consider increasing coverage limits when necessary. For example, if you only have the required state minimum limits for bodily injury coverage but cause severe injuries to a car full of passengers, a lawyer may pursue legal action against you for their medical costs. This could leave you financially vulnerable if you do not have the money to cover the expenses.
  • Homeowners/renters insurance: There are many types of losses that are excluded from a standard homeowners or renters insurance policy. Speak to your insurance agent about the additional coverage options available and evaluate whether you should add them to your policy. For example, earthquakes are typically not a covered peril, but if you live in an area prone to earthquakes, you may want to consider earthquake coverage.
  • Life insurance: The pandemic taught us that health disasters can strike anytime and can be very costly. Over a million Americans have died from complications related to Covid-19 as of late 2022, which in many cases resulted in financial hardships for their families due to healthcare expenses, burial costs and loss of income. Life insurance can be a helpful tool to protect your family from financial losses and hardships due to your death, so it may be worth evaluating your coverage to ensure it’s adequate.

Evaluate and negotiate your recurring expenses

As you look at your recurring expenses, decide what you need. While one or two streaming services might be critical, you probably can part with any beyond that, for example.

While nixing some unnecessary smaller bills can certainly help you pocket some money, bigger savings come with steering clear of bigger costs. Leasing a luxury vehicle might be tempting, for example, but choosing a mid-range option will keep more money in your pocket and probably help you save on insurance costs, allowing you to save or invest. If you rent, the same goes for housing. Think about your must-haves and look for rentals that meet those needs without paying for things you do not need.

Once you decide which regular expenses need to stay, evaluate each. Some, like cable, streaming and internet services, may be negotiable. Call your provider to see if they will offer you a lower rate to prevent you from leaving for another provider.

Other bills are fairly hard-and-fast, but you can still take strides to minimize them. We have tips to help you save money on your utility expenses, for example.

Ultimately, the last year has resulted in many Americans thinking more about financial planning. If you only do one thing to protect your family’s future in the face of another disaster, make it building a robust emergency fund.