3 Tips to Protect Your Finances During the Coronavirus Pandemic
The COVID-19 pandemic that is sweeping the world is having a major impact on everyone- especially when it comes to finances. We all understand the importance of saving for a rainy day, but in these days more than ever we see why that is true. At Amourgis & Associates, we work with our clients to help them better understand their financial situation. It’s a tricky world out there today, so remembering a few tips can help make a big difference when the unthinkable happens.
Set Up an Emergency Fund
You have been hearing this for years- set up an emergency fund that is equal to or greater than 3 months of your salary. That way, should financial hardship arise, you are covered in the short term. Unfortunately, not all Americans are able to meet this goal. In fact, 40% have said that if they needed to make an emergency $400 cash payment, they would not be able to do so. All is not lost, though. Whether or not you have savings, now is the time to check in on how far your money can last.
If You Have an Emergency Fund
How much do you have saved? Is it enough to get you through to three to six months? Things like job loss, medical emergencies, home repair or even this unprecedented COVID-19 pandemic can really impact our finances for the worse. Having funds on hand will help make life a little easier so you can make sure that your bills are paid, there is food in your cupboards and your family is cared for.
With things being so uncertain now, it is important to understand what you have in your emergency fund, where it is located and how you can access it, if needed. Some banks have closed for several days, leaving customers unable to access their safety deposit boxes. Others have all of their finances handled online. Taking inventory of where your money is and how you can get to it is only one step. Making sure that you can budget it so it can last though whatever crisis befalls you is another.
If You Do Not Have an Emergency Fund
There are some people that are not able to have an emergency fund set up. Understandably so, with so many of us living paycheck to paycheck, it can be challenging to set up money that you need now to work for you in the future. Try not to be upset if you could not set up an emergency fund. There are some things you can do now that can help.
If you are still currently employed, even just for now, think of ways that you can save over the coming weeks. Set aside anything you can to start building a small emergency fund. Every little bit can help. Also, now is really the time to stand out from the crowd with your boss. It can be understandable to be less motivated and with the added stress of working from home, home schooling and more. But proving your worth to your company is a great way to ensure job security.
If you are already facing a layoff, or have been laid off, it is important to understand your options. Check in with your state to see if you qualify for unemployment benefits, how to pause your federal student loans, how to work with your landlord or mortgage provider to see what your options are. Even your credit card companies can provide payment reductions or other relief to get you through.
Next, see if you can get a job on the side to help you through this period. Even if it is not ideal, it is income and is only temporary until you can get back on your feet.
Review Your Budget
Although this is something we should all be working on all of the time, now more than ever it is important to understand where your money is going. Looking at where you are spending money and how you can cut costs will help you get through these times. Being intentional with your money can help you keep the cash you have for the important things like making sure you have food to eat and your bills are paid.
Review your last few months of spending habits to see where your money is actually going (here’s looking at you Amazon Prime). You can use tools like Mint or Quickbooks to keep track. Here are some ways to reduce your spending:
- Making a meal plan. Take stock of your pantry and freezer and try to plan meals that are simple and fun to make. There are so many websites nowadays to find new meals with the items you have on hand. This helps use what you have and gives you something fun to do when you are at home!
- Review Your Subscriptions. We all have things we pay for but don’t necessarily use. Review your subscriptions and cancel what you don’t use. You can always resubscribe when you get more cash flow coming in.
- Curb unnecessary spending. With all the time being spent at home, it is only natural to do some online shopping. Yes, we want to help the economy, but being mindful of our purchases is key here.
Make Necessary Cuts
As we mentioned before, keep what you use daily and cut what you don’t. Yes, Netflix is good to have, but maybe you don’t need to keep all of your subscriptions right now. Find the ones you like most and take a break from what you don’t use. You can always re-up when you are making more money again.
Invest Your Money Wisely
You may think that now is not a good time to invest or that maybe you should sell your investments. We are not here to advise you to do anything with your investments, but keep your options open and don’t just make drastic changes based on fear. We will make it out of this and the economy will turn around. Take this time to review your strategies and find the best ones for you.
Amourgis & Associates is here to help you navigate this time of uncertainty. Our office is equipped to help our clients in a virtual manner, so give us a call, chat with us on our website or tune in to one of our Facebook Live chats. We are here and ready to help you with your legal needs.