Are you concerned about the impact of the current outbreak on your finances? Whether you’re living paycheck to paycheck or have a healthy savings account, we all need to re-evaluate the decisions we are making.
Keep reading to learn more about how you can make sound financial decisions during the current economic shutdown.
30. Think Long-Term
The recession has changed the world overnight. Jobs that people had been holding for years went away overnight, and unemployment went to record highs. It kept climbing, leaving the economy devastated and people’s livelihoods ruined.
If you want to make wise financial decisions in the midst of this, you need to be thinking about the long term. Emotions are probably running high, and you want to bail out. But think carefully through your decisions, as if you could live with them for the next five to 10 years.
29. Freeze Your Spending
If you have lost a job or been furloughed or if your significant other or family member has lost his or her income, then you will need to make some drastic spending cuts.
Immediately freeze spending for everything but essentials. Don’t resort to ‘online retail therapy’ to try to make yourself better. Remember that businesses everywhere are trying to provide people with essential needs, especially masks and hygiene products. Don’t buy anything not necessary.
28. Contact Your Credit Card Companies
If you have any credit card debt and are newly unemployed, call your card companies. They will most likely be willing to temporarily reduce or eliminate your payments as you try to navigate the financial ramifications of the current crisis.
If you’re worried about other bills such as internet or phone bills, call those companies as well. See if you can reduce your service (you probably don’t need data on your phone right now) or negotiate a way to reduce your monthly payments.
27. Call Your Landlord
Plenty of tenants right now are worried about being evicted, as they no longer have the income to make their monthly rent payments. Even if you have some money in savings, contact your landlord immediately if you’ve lost your job or been furloughed because of the ongoing situation.
Some locales, such as cities and even states, have frozen all evictions because of the impact of the outbreak. Also, if your state or city has not frozen evictions, your landlord’s best interest is to help you out so that he or she does not lose a tenant during a crisis. Try to negotiate a lower rent payment for the time being with the promise to go back to full payments as soon as you are working again.
26. Reach Out to Your Mortgage Lender
Evictions of people who have bought homes but are currently unable to keep up with their mortgage payments have been all but completely frozen. If you are in a financially difficult place, call the bank that provided your mortgage and explain your situation.
The bank cannot evict you, but being proactive and making a plan with the bank now can improve your outcome once you are working and earning an income again. See if you can negotiate a lower interest rate in exchange for continuing to make payments.
25. Don’t Hoard
Hoarding supplies is a privilege afforded to those who have the means to buy a lot of toilet paper, paper towels, diapers, canned foods, and other necessities. What this means is that grocery store shelves go bare and those who cannot afford to hoard must do without while others stockpile.
Hoarding supplies is both unethical and makes lousy financial sense. If you’ve become unemployed, the last thing you need to be doing is spending your last paycheck buying cases of toilet paper. Supply chains are still reliable, so don’t hoard.
24. Buy Only What You Need
If you have lost income because of the outbreak, buy only what you need. If you’re one of the fortunate people who still have a job and can continue working during this time of uncertainty, or if you are retired and living off investments you made earlier in life, buy only what you need.
Keep in mind that other people also need access to the necessities that many have been hoarding. Additionally, buying things in excess places strains on supply chains and workers who are still at their jobs despite the outbreak. Practice concern and compassion for those around you by only getting one week’s worth of supplies at a time.
23. Anticipate Lost Income
If you’ve not yet lost income because of the crisis, anticipate that you will. You’ll probably lose clients, marketing channels, and other critical components of whatever job you work. Additionally, getting services and goods delivered to people is becoming increasingly difficult.
If you plan now for the possibility that you’ll lose income, you can make the ride a little less rough. Call your credit card companies, landlord, or mortgage holder to see what options are available. Freeze your spending. Act as if you’ve already lost that income and spend only what you need.
22. Diversify Revenue Streams
Look into what options you have for providing yourself with additional income, even as you face the possibility (or reality) of losing your primary stream. Right now, renting out a room in your house is not an option. But there are plenty of other things you can do.
What skills do you have? Go to freelancing websites to look for clients with whom you can apply your existing skills in order to earn some extra money. If you have a business idea that you have been itching to develop, take advantage of your spare time at home to write a business plan and see about launching it.
21. Remember – No One Knows What Will Happen
You’re not the only person facing immense uncertainty right now. Everyone in the entire world is concerned about what will happen with their physical health as well as their financial health.
With everyone facing uncertainty, banks and other financial institutions are more willing than they might ordinarily be to work with you. Everyone has skin in the game here, and everyone wants to come out with as little lost as possible.
20. Look For New Opportunities
Have you been locked into a career for the past few years but are now facing the genuine prospect of losing it? Or maybe you’ve lost your job and are unsure of whether you will be able to find employment in the same field once the crisis is over.
If so, now is the time to look for new opportunities as you consider what your employment position maybe once the country starts to head back to work. Think of the search for new opportunities as a job that will require an investment of several hours per day. You’re not looking for a new hobby; you are looking for a way to make income once this crisis ends.
19. Manage Your Savings Appropriately
If you have a savings account, make sure that you are taking care of it as best as you can. If you have not yet lost your job, make sure that you are still putting money into your savings account so it remains healthy.
Don’t tap into your savings unless you absolutely must. Remember that you need to be thinking about long-term goals and objectives, not short-term emotions. Don’t empty your savings to go back to school to gain a new skill.
18. Talk With Your Financial Advisor
If you are one of the Americans who are fortunate enough not to be living paycheck to paycheck, if you have three to six months’ worth of expenses saved up, then now is a time to talk with your financial advisor.
Keep in mind that nobody, not even your financial advisor, knows what the outcome of the American economy will be once the crisis is over. But he or she can help you make well-informed decisions to help you weather it better.
17. Don’t Change Your Strategy
The middle of a global financial crisis sparked by a deadly outbreak is not the time to change your financial strategy. Remember that any decisions you make now need to have long-term goals in mind, so keep planning for retirement and investing as you can.
You may need to temporarily lower how much money you are contributing to investments. But even if your finances have taken a hit in the market downturn, now is not the time to change your investment strategy. Wait until the crisis is over before making any changes.
16. Consider Learning A New Skill
If you’re currently out of work, look into what jobs are projected to be in high demand when the crisis is over. Healthcare will undoubtedly be looking for new workers. You don’t need to go to medical school to work in healthcare. Phlebotomists, lab techs, CNAs, medical clerks, and other personnel are necessary to keep the healthcare system running.
You can’t train for healthcare without going to an on-site program, so at the moment that’s not a possibility. But if you are looking into other fields, see if you can start getting some meaningful training online. Check what vocational programs are available at your community college and talk with administration about online options for the time being.
15. Brace For Uncertainty
Remember that everyone is facing a high amount of uncertainty right now, and the biggest priority is being able to minimize the impact of the crisis. The impact is already known, considering the record-high unemployment and drastic measures that governments are taking to prop up the economy.
If you’ve not yet experienced uncertainty in your own life because of the ongoing situation, brace yourself. And if you are anxiously watching your investment portfolio ride the downturns of the present market, know that you are not alone. These are uncertain times for everyone.
14. Don’t Stocks That Have Plunged
The common market advice is to buy fear, sell greed. It means that when stocks start to go down, and people sell off their holdings, you need to buy them while they are cheap. But that conventional wisdom may not serve you well during a global economic crisis.
There will be vast changes coming to the entire economy, and some stocks may not bounce back. Oil may not recover as people are looking more to renewable energy. Companies are going bankrupt, with some closing their doors and others trying to reorganize their finances. Buying up stocks that have bottomed out with so many changes coming may not be a good idea.
13. Unless You Diversify Your Portfolio
If your financial strategy has consistently been to diversify your portfolio and you’ve been buying stocks from various industries, then moderately take advantage of lower prices right now after consulting your financial advisor.
But don’t clean out your savings account to buy shares that have plummeted because you think that you’ll get wealthy when the economy recovers. The economy will probably not recover immediately, and there will be systematic changes to how the entire country works.
12. Don’t Expect To Capitalize
There’ve been some people who have thought that they would get rich off this crisis by buying up supplies and selling them at a premium. A New York Times article reported on a pair of brothers who rented a moving van and drove all through their state buying up all the hand sanitizer to sell at inflated prices.
Hoarding life-saving supplies during a pandemic is severely unethical and ensures that people in vulnerable categories will not have access to what they need. It will also leave you with a huge bill, as Amazon, eBay, and other online platforms are blacklisting sellers who attempt to mark up supplies they have hoarded.
11. Only Make Investments You’ll Hold For Three Years
Don’t consider stores of bandanas sitting in your garage to be an investment. And don’t think 15,000 bottles of alcohol-based hand sanitizer to be an investment. Investments are portfolio options that you hold onto for at least three years.
If you are prepared to hold onto an investment for the next three years and ride the rollercoaster of markets are currently in, then talk with your financial advisor about the risk involved and potential benefits. Otherwise, you’re only looking at a get-rich-quick scheme that may leave you broke.
10. Evaluate Cash Reserves
Before making any financial decisions during this current crisis, you need to evaluate your cash reserves. That’s true whether you’re living paycheck to paycheck, have lost your primary income, or have the luxury of being able to continue working on your financial strategy,
Determining how much cash you have on hand can help you in your negotiations with credit card companies, landlords, car lenders, and any other companies that you may owe money. It can also help you determine how much you can afford to invest while making sure you can still provide for your own needs.
9. Keep Saving If You Can
If you have to choose between saving and investing, right now, you should save. Banks are insured by the Federal Reserve up to $250,000 for each account, so your money will be safe if it’s held in a savings account. If your payment is invested, it may take a plunge and disappear overnight.
If you still have the luxury of bringing home income, put as much of it as you can into savings right now. Anticipate that you will lose at least some of your income very soon; hiding some of it away will help cushion the fall you may take.
8. Don’t Deplete Your Savings
If you are newly unemployed because of the outbreak and have a savings account, you are probably not in a position to be able to continue building up your savings. You may even need to tap into it. After all, your savings are for a rainy day, and a global economic shutdown amounts to a rainy day.
Only take from your savings what you need after exhausting all other options. Watching your savings go down instead of up can be discouraging, but do your best to not completely deplete your savings.
7. Look At New Career Options
Many people are suffering from the fact they may not be able to return to their former jobs. Many companies have gone bankrupt and closed their doors, while others already know that they will not be able to rehire all of the employees furloughed.
Now is the time to look at new career options. Consider learning computer coding or finding out how to become a teaching assistant. If you have wanted to go back to school, now is the time to start researching what programs are available and what financial aid you will qualify for.
6. Look Into Online Learning Platforms
There are plenty of ways to learn a new skill, and not all of them involve going back to school. There are many online learning platforms, such as Udemy, that offer courses taught by skilled instructors. You won’t get a certificate that the industry as a whole recognizes, but you can gain new insight and knowledge regarding a field that interests you.
Right now, many of these courses can be taken at steeply discounted rates. Art and writing courses that generally cost thousands of dollars are far less than $100 because the instructors want to be able to help those who are financially struggling due to the crisis.
5. The Economy Probably Won’t Bounce Back Overnight
If you’re hoping that this crisis will only last for a few weeks and then everything will return to normal, your hopes are not realistic. As Dr. Anthony Fauci has said repeatedly, we don’t set the timeline on this. The illness does. We have to do our part to keep it from spreading.
After the entire world goes on a complete economic shutdown and governments struggle to freeze their economies in place, significant changes are definitely in store. This crisis will not end soon. If it has not impacted you yet, it will. If it has affected you, show strong leadership for your own life and determine what direction you want to head.
4. Understand More Changes Are Coming
Your life will not look the same when the world emerges from this present hibernation. You may not return to the same job. If you are in school, you may find that there have been drastic, systemic changes in how the school is run. The world may be unrecognizable.
Prepare yourself now for the fact that everything will change as a result. Global markets are already undergoing fundamental shifts. Entire industries will likely collapse. Do what you can do to make sure that you are as ready as possible for whatever changes are coming your way.
3. So Keep A Vision For Your Finances
Knowing there will be significant changes that face not only individuals but entire financial systems and global industries, make sure you have a long-term vision for whatever’s next. Do what you can to manage your finances well today so that you can meet the challenges that will continue coming.
Maintaining a long-term vision when nothing is defined is a challenge none of us wanted to face. But it’s what we have. Remember that the day-to-day decisions, not the big choices, are the ones that will carry you through to the other side.
2. Safeguard Your Mental Health
The best advice that anyone can give during this time is to safeguard your mental health. Staying at home takes a toll on people. Not being connected to community networks of friends and family makes us realize how much we appreciate those people. We genuinely feel the absence of those people.
Many counselors and community health professionals are now offering their services for free to deal with the spike in mental health concerns due to the current crisis. Do whatever you need to do in order to access help that will keep your mental health in good shape.
1. Know You Will Get Through This
The pandemic has caused people to come together in ways that they never have. Entire communities are showing solidarity around hospitals and healthcare workers who are on the frontline fighting the pandemic. Grocery stores and retail workers are being appreciated.
Lean into this community spirit that is causing people to come together, even while they have to remain apart. Know that as long as we continue to come together, we can and will get through the worst of this. We will probably show the wear, but we will get through it.