How to Manage Finances During Covid-19
Covid-19. A virus with such a simple name, but a huge impact across the world. People’s health and finances took the biggest hit. The Stay-At-Home order was implemented to flatten the curve, but ended up crushing employment and bank accounts. With all the uncertainty in the world, managing your finances doesn’t have to be one of them.
First off, create an emergency budget or bust. It’s important to understand that an emergency budget is not the same as an emergency savings account. A savings account takes time to accumulate and can be used when a crisis strikes. One may not have the financial resources to save money over time for this type of account. If not, an emergency budget just might be the solution for them.
Unlike a standard budget, an emergency budget is very strict and essential during these times. All excessive expenses must be stripped from the budget to accommodate necessary costs. The budget depends on the entire household, so everyone should be aware of the changes and cutbacks. Renting movies, purchasing online gaming, and downloading costly apps should be out of the question.
First things first, track all costs that are crucial. This includes food & housing, utilities, and additional debts. Second, eliminate everything that isn’t essential instead of deferring payments so it doesn’t catch up to the budget in the long run. Cancel items like music/television streaming services, monthly Amazon Prime, and subscription boxes. Lastly, cut out all “fun” money. This doesn’t mean stop having fun, just do it for free.
Next, don’t worry…be savvy. During this challenging time, it’s easy to get distracted by loans and credit cards. Remember, both options are a temporary fix. Due to this, shop around and choose the best credit card or loan option based on your personal finances. Start off by doing research on Annual Percentage Rate and grace periods. These are important factors to understand when narrowing down which credit card or loan selection is best for you. Taking on debt can be frightening, but being prepared can help.
Spring is in the air, which means it’s a great time to purchase a new home. You should take advantage of the low interest rates being offered during Covid-19 before it’s too late. Have you been wanting to list your current home? Quarantine is the perfect time for spring cleaning and DIY projects. Your house will be ready to list in no time. If you love your current home, maybe it’s time to refinance. Reach out to your mortgage lender for more information. Don’t forget to include your lower monthly payments in your emergency budget.
In a situation like Covid-19, it’s easy to stress over your credit score. This isn’t a time to focus on the details, but to look at the big picture. Don’t be afraid to ask for help right now. Reach out to your lender or creditor to see if any accommodations can be made. Pay the minimum payment on accounts and avoid late fees instead of not paying at all. Missing a payment can cause more damage to a credit score in the long run.
Last but not least, keep calm and invest on. The last couple of months have been cruel on investors. Popular companies are seeing dramatic drops in their stock market values. Fighting the urge to sell your stock is the best thing to do at the moment. History has taught investors that the stock market will recover and come back stronger. Holding out on cashing out is the best option when all is said and done.
Interested in purchasing shares? This could be the perfect time. If you have the means, take advantage of the low price. The opportunity to buy at the current value may not last long or occur again in the near future. Obtaining stock today could potentially reap substantial rewards in the future.
Covid-19 is not only a health crisis, but a financial one. This isn’t the time to let panic consume you, but motivate you. Crunch those numbers and create an ideal emergency budget for you and your family. Take time to make wiser choices while tackling financial burdens. Invest the right way and keep what you have for the long haul. The Coronavirus is tough, but we’re tougher.
We’ll get through this. We always do.
