Five personal finance habits busted by the pandemic – The National

Five personal finance habits busted by the pandemic – The National

Having an emergency fund to protect your financial health during a crisis has been amplified by Covid-19. Treating your credit cards and overdraft as your emergency fund. Relying on credit cards or an overdraft facility as a back up when things go wrong can cause issues.. While some only consider tapping into these funds in a time of crisis, relying on debt to bail you out when you have lost your job or had a salary cut is very risky.. The study found 16 per cent would use a credit card to fund expected costs, which echoes concerns from the US Federal Reserve about the country's lack of emergency funds.. Stuart Ritchie, director and chartered financial planner with the global wealth advice company AES International, says he advises residents to avoid taking out credit cards and overdrafts.. The pandemic has underscored the importance of saving for the short-term and for emergencies as well.. Rather than just focusing on investments, Mr Ritchie says "it's far better to put aside a portion of your salary every month towards an emergency fund [as] a comfortable cushion when times get tough".. It is important to ensure the size of the loan doesn't become a