Whether you have been furloughed, lost your job or been able to keep working, using this pivotal moment to spur new financial habits can be an opportunity for a brighter financial future.

The COVID-19 pandemic has caused a huge economic shock that has impacted people in various and unexpected ways, like having to adjust to new remote working conditions, a lack of childcare and even job loss. However, pivotal moments such as this can be a great catalyst to re-examine your spending patterns and learn new, healthy financial habits that will lead to long-term benefits.

1. Priorities re-evaluated

   Lockdown has provided a chance for individuals and families to take a hard look at where their money goes. With opportunities for discretionary spending on socializing, eating out and, of course, vacations limited, you can focus on what really matters. It’s likely you’ve had good intentions to overhaul budgets and spending habits anyway, so use the current situation to create some household goals. If you have enough cash on hand to pay everyday expenses, this could include a down payment on the mortgage to clear it quicker and allow you to entertain the option of retiring earlier than planned. If you have children, then education is sure to be a main priority for the long term – another goal might be to save for a special family vacation together. Prioritize your discretionary expenses on these aims and protect that amount from being spent elsewhere.

2. Trim the fat

   Once you’ve prioritized essential spending, or everything you need to survive – food, basic clothing, taxes, utility bills, housing costs and the cost of childcare all qualify – try to reduce other expenses. Bear in mind, however, that a budget should retain some joy, if you can afford it. Leave room for things that contribute to emotional wellness, but cancel subscriptions and memberships you don’t use — especially if they renew automatically. Decide to eat out just once a month and cut back on takeout — use the opportunity to cook fresher, healthier dishes for yourself or your family. Take the opportunity to look into cheaper alternatives for things such as insurance premiums, virtual classes versus gym memberships, cell phone and broadband contracts, and entertainment packages. Also, there are plenty of free or low-cost apps available that can automate your savings and spending plans to help you stick to them. And never buy anything non-essential on the spot – sleep on it and ask yourself whether it’s really a necessary purchase.

3. Increase savings and pay off debt

   Recent events have emphasized the importance of having instant access to cash for unexpected events. Financial advisors generally recommend having enough cash in the bank to cover 3- to 6- months’ worth of expenses. Setting up an automatic transfer to a savings account on the day you receive your paycheck is a smart move – you won’t have to remember to do it each month, and can reduce the temptation to spend the money instead. At the same time, tackle credit card and other debts once and for all. If you can, transfer everything to a card with a 0% introductory interest rate for the first 6 to 12 months. Do not use the card for any new charges, and encourage yourself to pay off the balance as soon as possible.

4. Invest for the future

   If you are fortunate enough to still enjoy a regular paycheck or have funds to invest, then now is the time to do so. The markets have already started to recover from the steep drops earlier in the year and evidence of past recessions is that they will likely continue to bounce back. While there are industries and companies that will struggle to recover from the pandemic, such as non-essential retailers, hospitality and travel, there are also plenty of businesses that will not only survive, but thrive. Holding a balanced portfolio of stocks, bonds and other assets is generally regarded as the best long-term strategy, and has proven to deliver the most consistent returns. However, consulting a financial advisor is always recommended, as they can suggest the best investment plan for your own circumstances.

5. Second career act

   If you've lost your job as a result of the pandemic or the sector you work in will be affected long-term by the consequences, now is obviously a good time to consider all your options. Being laid off is a major setback but you can try to turn it into a positive by pursuing a new career direction based on a long-held passion, or a former qualification or degree. And even if you are fortunate enough not to have been adversely affected, you may still decide to reassess your career path, and look for new pastures to explore. Alternately, your employer is likely to be more open to flexible, remote or part-time working should you want to improve your work-life balance.

6. Learn the lessons

   Whatever your financial situation was before the recent economic turmoil, resetting your approach to money issues won’t happen overnight. You will need to adapt as you progress. But as long as you learn from your experience, you will find your financial situation improves quicker than you had expected and puts you on much firmer footing to tackle whatever lies ahead.