While most of the memes we see on the Internet have to do with "homeschooling" or toilet paper, for most of us, there are so many more implications of this COVID-19 shut-down. Many of us may be facing some tough decisions with our business, with our homes; we may be faced with balancing work and pandemic-schooling. The biggest concern for some is how to rebound to "normal" when this is over, after spending down some of your savings to steer straight right now.
Much of this will depend on your CURRENT financial situation - Is your job secure? Do you have an income? Do you have debt (other than your mortgage) and how healthy is your emergency fund? Not everything is doable for everyone, but according to Nic Nielsen, CFP, with Know My Plan at LPL Financial, here are a few tips to consider.
Tips For RIGHT NOW:
- Make lists for everything - from your food needs to your educational assistance tools.
- Revise your Budget - take a look at what you're spending and see if you can eliminate anything.
- Try to stay off the Internet - online shopping makes life easy, but it also is an easy way to blow through all your money; especially when you are trying to save.
- Modify your contributions if you need to - don't stop contributing all-together if you can avoid it, but it is ok to change the amounts. You should always pay yourself first.
- Call and ask for help - many daycare centers and schools are offering payment solutions, landlords are working with tenants on rent and other service providers may be following suit. You never know unless you ask.
- Reach out to your banker - most likely they will work with you to ensure that your bills are getting paid (and so are they!)
- Take advantage of low-interest rates and look to refinance to a shorter-term to pay off your mortgage quicker.
- Make sure you understand the federal stimulus plan - and if not, ask someone who does!
Tips for the FUTURE:
- Make a plan - find a financial planner you trust and talk to them about how to plan for disasters like this. While it may not be the same thing, there will be another catastrophe and you need to be prepared.
- Keep contributing to your retirement plans. If you are putting aside money every week, try to keep doing that. If you need to change the amount (without penalty, of course) do that.
- Before making any huge purchases (house, car, etc), make sure you can afford them even if you are without income for at least a year.
- Consider getting a HELOC (Home Equity Line of Credit) to use as an emergency fund. If you don't have equity in your home, open up a savings account and begin portioning off some of your paychecks each week/month into that for your emergency fund.
- If you are an investor, focus on accumulation - pay attention to the number of shares you have and not what they are worth. We cannot control the value of a stock - we can control what we own and how much. Make sure your dividends are reinvested so you are automatically purchasing more shares. Participate in the ownership of great companies to help your net worth increase.