The world is currently in the midst of a once-in-a-lifetime pandemic that many of us didn’t see coming. Some areas of the economy are struggling, while others are surprisingly booming. People are making more money by filing for unemployment than they would be making at their job. It’s a very unpredictable sport that we’re all in, especially when it comes to your COVID-19 finances.
But aside from staying healthy and keeping sane, is there anything else that you should be doing? More specifically, is there anything you should be doing or worrying about financially during Covid-19? Please sit back and take some notes while we teach you
about the new world of Covid-19 finances and Covid money management.
1. Has Your Income Changed For The Better? Don’t Spend It!
Some of you have been able to either keep your job as normal or switch to a work-from-home position. Despite this, you probably still received a stimulus check. Others out there weren’t so fortunate, yet you may be making more with unemployment than you were at your job, thanks to the supplemental income provided by the CARES Act.
Maybe your income hasn’t changed at all, but you’re spending a lot less because you no longer have a morning commute and aren’t eating out for lunch like you would during a typical Monday-Friday workweek.
Whatever the reason behind you having extra money may be setting that money aside and not touching it. Just because you have extra money doesn’t mean you should spend it. This temporary lifestyle inflation is just that, temporary.
2. Has Your Income Changed For The Worse? Try A Side Hustle!
If your income has taken a huge dip, now might be a good time to take advantage of the shelter-in-place rules and quarantine measures that most states have enacted. There are many ways to get out there and earn anything from a few extra bucks to a full-time income.
Amazon’s Mechanical Turk, a micro-tasking platform, is becoming popular with those looking to earn a little bit of extra money by doing data entry, image tagging, and various other small tasks. Another option may be freelance writing with a company like Verblio or Textbroker.
Or maybe you would prefer to transcribe audio with a company such as TranscribeMe or REV. You can even find a full-time work-from-home job with a massive, well-known company such as Apple or American Express.
See our full write-up on the best side hustles for extra money to help you with your COVID-19 Finances.
3. If You Need Help Then Ask For It
These are unprecedented times that we are living in. Many states have moratoriums on evictions, the federal tax filing date was extended, and there’s even student loan relief for those who need it.
If you feel like making a certain payment will put you in a tough spot or if you cannot make a payment at all, then call up your lender or creditor and ask them if there’s any hardship relief or if they have any deferment options in place.
Regardless of the unique situation that we’re all in, missing a payment can still damage your credit. Calling and asking for help can likely prevent that from happening.
We understand that just the thought of calling someone you owe money to can be very intimidating to many consumers out there. The best thing you can do for yourself is remember that whoever picks up the phone whenever you call is a normal human being like you and me, just trying to do their job to support their family.
Before you call anyone for help, be sure to note your current expenses and any income you may have. Your creditors may need to know this information to qualify you for a hardship or deferment program potentially.
4. Interest Rates Are Super Low Right Now
You may want to consider taking advantage of low-interest rates right now. As of May 2020, mortgage rates are at an all-time low. Many Americans are using this as an opportunity to refinance their mortgages to take advantage of the lower rates.
Maybe your credit wasn’t so hot a few years ago when you got that new car, so you were stuck with a high-interest rate. Try refinancing it for a lower rate and lower monthly payments. If you have the means to do so, shop around and see if any of your debt can qualify to be refinanced at a lower interest rate.
Do you have a lot of high-interest debt? Perhaps a lot of revolving debt from credit cards? Now is a great time to consider debt consolidation by taking out a personal loan to pay off this credit card debt and consolidating it down to one monthly payment.
Typically personal loans have higher interest rates than other loan options. Still, with interest rates, at an all-time low, those who need to consolidate their debt find themselves in a wonderful position.
5. Don’t Fall Victim To Emotional Investment Decisions
One of the worst investment decisions you can ever make on your long-term investments, such as a 401K or IRA, is buying and selling based solely on emotions. Many Americans have started to panic because of the stock market woes we saw back in March and April. As a result, they have liquidated their portfolios and emptied their retirement funds without regard to the early withdrawal penalties and fees.
Yes, these are unprecedented times we are in. Yes, the stock market has taken many tumbles over the last few months. But liquidating now only to go back and re-invest later on once the smoke clears may do more harm than good. Is it really worth it to bail out now and take a 20%-25% loss?
The stock market stands to make a tremendous rebound over time once the economy opens up and gets back into full swing. Unless you’re a day trader on Wall St., there’s essentially no benefits to jumping ship now.
6. Learn To Use This Time Wisely
Now is a great time for every American out there to build up their knowledge of money and finances. In fact, April was National Financial Literacy Month. Did you use your time to learn something new?
If you’re following the advice of experts and lawmakers for staying home as much as possible, you might find yourself with a lot of extra free time. Why not use this time wisely to invest in yourself? Learn something new. Parents may even use this time to start teaching their children about the fundamental basics of personal finance.
Learn how to budget properly. Figure out ways to improve your credit. Get educated on the various methods of paying off your debt. There’s so much to learn out there, and every single one of us has room for improvement with our COVID-19 finances.
7. Trim A Few Things From Your Spending If Necessary
Our lives are undoubtedly different. Whether these changes are temporary or more long-term remains to be seen. In any case, there are plenty of ways you can trim down your spending and keep a more strict budget.
- Are you “outsourcing” anything? For example, are you paying someone to come cut your grass for you still? With all of the spare time many of us have, you could probably save a lot of money by mowing your own lawn or by cleaning your own house.
- Stop taking advantage of all of these restaurants offering so many different to-go meal options. Cooking for yourself can save tons of money. In fact, meal prepping can save you even more in the long run.
- If you’re in a really tight spot, it may be best to make only the bare minimum on your credit card payments and hoard as much cash as possible. This is terrible advice under normal circumstances, but the world is far from normal right now.
- Call up your insurance providers. Many insurance companies, especially those that provide auto insurance, are trimming down premiums for their customers. Even if these smaller payments are only temporary, it doesn’t hurt to ask!
- Cancel monthly subscriptions that are not a necessity right now. Do you really need 4 video streaming services and 2 music streaming services? Are you going to die without having your trendy monthly subscription box?
COVID-19 Finances Summary
When it comes down to Covid-19 finances, there isn’t a one-size-fits-all solution for everyone. The best thing anybody can do is watch their spending, save what they can, and try and talk to creditors whenever possible.
The worst thing anybody can do, as we mentioned above, is start letting their emotions get the best of them when it comes to their investments and retirement. This is a learning experience for every single one of us. We can try our best to make smart and informed decisions while staying safe in the process.