How to manage your money as if you're in the 2020 pandemic

I want to cover how to manage your money because of how the 2020 pandemic has caused a lot of financial issues and shown that being able to manage your money in 2020 is an essential skill everyone needs to master.

By Will Mayger in Finance |2020-06-07

Hi everyone.

Today I want to cover how to manage your money because a lot of people have the wrong idea about how you should start off and what you should be aiming for.

To top things off, the current 2020 pandemic has caused a lot of financial problems for many people, and whilst some of these issues are unavoidable, I feel that most could have been helped with proper financial planning and money management.

It’s time to learn how to manage your money as if you’re in the 2020 pandemic.

First thing’s first.


You need a budget.

It is probably the single most important thing when it comes to personal finances and money management, without it you are essentially blind to your financial situation.

If you think about some of your hobbies there are always fundamentals or basics that you need to learn before you can start to get better.

Well, your budget is the foundation of your personal finances.

So, step 1 is to create your budget and stick to it.

To create your budget, start by writing down your monthly income, followed by all your monthly bills.

If you are struggling to think of monthly bills just open up your banking app and go through the past couple of months writing down anything that reoccurs.

Once you have all of that written down split the bills into two categories called mandatory and discretionary.

Mandatory bills are bills that you cannot survive without and you absolutely need, so your rent/mortgage, food, utilities, and so on.

Discretionary bills are bills that you don’t need to survive, so your gym, phone, and netflix subscription.

When I say survive, I mean it literally, so no you don’t need your gym membership or phone to survive. For example you need food, water, shelter and clothing.

Now add up the total of both, if that total is less than your total monthly income then that is a great start.

If not, then you are in minus and you need to look into it immediately because it means you are likely either going to have to use savings or debt to pay for your lifestyle.

To correct it you need to look through your discretionary bills and start cancelling subscriptions and removing bills where possible until you reduce your total expenditure to less than your total monthly income, it might be difficult but unfortunately it is unavoidable if you are in minus figures each month.

Now the next step is to take 1% - 10% of your total monthly income (as long as you are still within your total monthly income) and then use this amount as a personal allowance that you can spend on whatever you like in the month. E.g if you earn £2000 per month, your personal allowance would be between £20 - £200.

Finally all the money left over you should either save or invest depending on your situation.

Ideally you should be aiming to save over 45% of your total monthly income.

You can find a basic excel sheet here that I created that you can use to start budgeting with.

Emergency fund

Now the next thing you need to do is get an emergency fund, and this is a big one with the 2020 pandemic.

You need a safety buffer, emergency fund, or rainy day fund.

Basically, you need a decent amount of money in an easy access savings account that you only touch if there is an emergency.

The idea behind one is that if you happen to end up in an emergency where you will come under financial strain, for example if you were to lose your job because of the pandemic, it will support your current lifestyle and pay your bills until you get back on your feet.

On top of this, even if you are not facing an emergency, it will give you confidence in everyday life which means it opens up opportunities as well.

With one, you no longer need to rely on your job quite as much, which will take the pressure off .

Now, it should be at the top of your list with the possible single exception of debt.

You should not be thinking about saving for a house, a car or thinking about investing if you do not have an emergency fund in place.

So, how much do you need to save up?

Well you take your total monthly expenses, minus your savings and multiply that by 3, 6 or 12, for the amount of months you would like to be funded for.

I will say aim for at least 3 months as a minimum and don’t have any more than 12 months saved up.

This is because after 12 months you will already be safe for an entire year and there are better places to be putting your money.

So for example, if your expenses are £1500 per month and you want a 6 month emergency fund, you would need to save up £9000, or £4500 for 3 months.


If you have debt then it is probably a good idea to get rid of it before thinking about any further financial decisions.

Now, don’t get me wrong, debt in itself is not a bad thing, but most people use it to finance cars, and other expensive things that they can’t necessarily afford and don’t really need.

I’m not saying you can’t have the things you want but you should buy them at the right time, and with the right financial management you will most likely be able to get it at some point, so you need to be patient otherwise you might end up in a situation that is difficult to get out of.

If you can’t afford something then you shouldn’t buy it unless it will end up making you more money, for example a buy to let mortgage, or getting a loan to grow your business.

There are many approaches you can take to pay off debt, but the simplest and one of the best is to make regular overpayments to one of your debts, try and overpay as much as possible and after it is paid off, if you have other debt, then choose one and repeat the process until your debt is paid off.

Now on another note, you should have a credit card. That may sound weird after I just said that you should pay off your debt, but having a credit card can actually build up your credit rating with minimal risk.

Just make sure that you never spend more than you can afford, so going back to the start, never spend more than your personal allowance, and then all you need to do is pay it off at the end of every month.

This way you will never pay interest, but you will slowly build up your credit score for when you need it.

Future planning

This is now where you are going to have a little more freedom.

When you get to this point, you should have your debt under control and be without “bad debt”, you should have your emergency fund and you should have a solid, efficient budget.

Now you should be thinking about what to do with your money to give you the best return on investment, I won’t go into much detail, but there are many routes you could go down.


One option for those who are very risk averse is saving your money in a long term savings account where you get the best interest rate you can.

Whilst this is a safe option, I personally would not recommend this. Remember that the less risk you take the smaller the reward.

A house

The next option could be that you either want to buy a house, or pay off your mortgage sooner.

Now if you do already have a house and a mortgage, I highly recommend that you do make overpayments and try to pay it off asap.

This could be a huge reduction in your monthly expenditure, and you will save yourself a lot of money on interest.

However, if you don’t currently have a house, this might be an option for you depending on your future aspirations.

If you are looking to settle down, and have a family then this might be a good choice, but it is not the best option if you are looking to maximize your ROI (return on investment).

So if you’re looking to build your wealth you might not want to buy your own house right away, with that being said there can be circumstances where it could be beneficial.

Stock market

This is where we start to look at ways to maximize your ROI. The stock market can be a great place to do this, it is probably one of the simplest ways to invest in terms of acquisition. But when it comes to understanding what to invest in and what to avoid, it becomes a little more complex.

Personally, I prefer to buy and hold whenever I invest in the stock market, this is because it is not where I am focusing my attention on and buying and holding is the easiest way to invest in the stock market whilst historically providing solid returns.

A personal favourite would be the S&P 500 UCITS ETF (VUSA) or the FTSE All-World High Dividend Yield UCITS ETF (VHYL)


Commodities are another way to invest mainly by buying and holding but they also serve another purpose.

If you feel worried about your country’s currency, you can invest into commodities to mitigate this worry.

Commodities, unlike currency, hold intrinsic value which means the material they are made with is where their value comes from.

Currency only has a face value, which is a legal value that has been assigned to it.

The reason why intrinsic value commodities are generally better than currency to keep your wealth is because there is a finite amount of the material in the world meaning the value should either hold or go up except from certain circumstances where either supply goes up or demand goes down, whereas currency gets created and printed every day whether that is a number on a computer or a bank note and it can fluctuate much more easily.

Real estate

Real estate is by far my personal favourite when it comes to investing your money.

This is because not only does it have the ability to go up in value just like the stock market, you also get paid monthly to own it which leads onto the main benefit which is cash flow.

Regardless of whether the value of the property is increasing or decreasing, you will earn money each month via rental income, which can be known as passive income.

The only downside to real estate investing is the entry level.

You need a lot of money to get started and there are a lot of steps to it that you need to learn to successfully rent out a profitable property.

Starting a business

Starting a business will most likely be one of the best options for most people but it does have one of the highest risks associated with it, but that also means it can have the one of the highest rewards and best return on investments as well.

If you haven’t already but are interested in starting a business and can deal with the risk, it is definitely worth doing.


Finally paying more into your pension is another option you could look at for investing your money into for a good ROI, the only downside is that you won’t be able to access this money until retirement but with all the compounding that will occur over the 20 - 50 years will mean you should have a very comfortable retirement.

By Will Mayger in Finance.
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