Money Saving 101: Daniel Orfin on What People Can Learn from the Massive COVID-19 Layoffs
The COVID-19 pandemic has thrown people all over the world for a loop. Few people were prepared for a global economic recession and the effects have been devastating. Millions of people have lost their jobs and are now in more financial trouble than ever before.
Daniel Orfin is the founder and president of Orfin & Associates. Orfin & Associates is based in Troy, MI, and they are very diligent in helping their customers achieve their long-term financial objectives by keeping things simple and utilizing a Safety First approach. Through his extensive experience in the finance industry, Mr. Orfin believes that one silver lining of the pandemic is that it will lead many people to rethink their financial planning goals. He shares some money saving tips that he hopes people will take away from the COVID-19 pandemic.
Always Plan for an Emergency
If there’s any financial lesson to be gained from the COVID-19 pandemic and the subsequent recession, it’s this: always plan for an emergency. If you didn’t already have an emergency fund set aside prior to the pandemic, now is the time to start saving. One thing that no one will soon forget is that emergencies can happen any time, even when you least expect it. Preparing for them in advance can significantly help mitigate the possible effects, such as being laid off.
When it comes to an emergency fund, experts recommend setting aside three to six months’ worth of living expenses. This includes everything — housing, utilities, food, and transportation. In addition, Dan Orfin of Orfin & Associates always recommends creating an emergency plan that not only includes funds, but also research detailing what options you might have should you run into financial trouble. Knowing where you can turn and what’s available to you in the event of an emergency, such as a line of credit, can help put your mind at ease.
Living Simply is Underrated
Yet another money saving lesson we can all take from the COVID-19 pandemic is that living simply is vastly underrated, shares Daniel Orfin. When countries around the world entered lockdown mode, people had nowhere to spend their money. This made many realize that perhaps they were spending more than they needed to and that they can be just as happy without those extra costs. Cooking at home instead of ordering in, learning to cut your own hair, or even watching a YouTube video and learning how to do a home repair yourself are all ways that people have learned how to save money during COVID-19. It may have started out of necessity, but it’s likely to become many families’ long-term realities, even as restrictions ease. Plus, many people are learning that living simply doesn’t just save money, it may also make you feel healthier, happier, and more connected to those around you.
Identify Needs Versus Wants
Identifying one’s needs versus wants is a useful tool in life more generally, but especially so when it comes to personal finances. Due to COVID-19, many people are now having an easier time identifying what they need to be happy and many people are finding it is less than they thought. That said, the road to this place wasn’t easy. Many people lost their jobs and didn’t have a backup plan in place, leading to major money shortages that forced people to make tough decisions. In the long term, Daniel Orfin hopes that one positive from the pandemic will be that people have an easier time deciphering between their needs and wants when it comes to discretionary spending.