Are you dealing with serious financial hardship caused by the COVID-19 pandemic?
Even if you have not lost your job, or had to shutter business, you are undoubtedly experiencing some loss of income.
Although many states are beginning to reopen, the economy will not immediately ramp back up to the way it was before the pandemic brought things to a halt.
However, there are ways to stabilize your finances, and still stay on the path towards your personal financial goals, even during the coronavirus crisis.
With that in mind, here are some tips on how to steady your financial ship right now!
Prioritize and keep up with your bills
One of the most important things all financial experts say to do right now is to do your absolute best to keep up with your bills. There have been programs implemented to help you if you are struggling to pay your bills due to the financial impact of COVID-19.
However, if you can still pay your bills, you will be much better off staying on track. And, remember, most if not all such help allows you to defer payments. These initiatives do not cancel your debts. You will still owe all of the money you have not paid once the program ends – and that may be even more difficult to pay if months of bills have been accumulated.
If you cannot pay all of your bills, prioritize. When you are deciding which bills to pay, and which to delay, ask yourself, “if I do not pay this bill will it make me, or my family unhealthy or unsafe?” Give priority to any “yes” answer.
Make minimum payments
While usually it is inadvisable to pay less than the minimum due on debt, particularly credit card debt, now is not the time to aggressively pay down debt. If you lost your job, or are struggling financially, keep paying your debts, but pay as little as possible.
Save, save, save
If you still have an income, now more than ever, it is critical to contribute to your savings. Your savings goal should always be to have six months’ worth of what the experts call a “noodle budget,” which is the lowest budget you can get away with per month.
Keep your money in the bank
When things get tough and money is tight, it is easy to panic and run to the cash machine and take out more cash than you need to keep at home. This is a bad idea. Leave it in the bank where it is safe, and you are less likely to overspend it.
If you are just getting by, of course, you need to do the “belt tightening” techniques above. But, if you do still have a steady income, and are making ends meet, now could be a great time to invest. As long as your income is stable and you have robust savings, you should consider bumping up your 401(k) or Roth IRA contributions, and if you don’t have one of these accounts set up, now may be a good time to get started.
The bottom line is, now more than ever, it is the time to drop back and reemphasize the basics to financial success – budgeting, having a savings plan, managing your credit, managing your debt, and making sure you are fully insured and managing basic investing as it relates to your retirement.
What do you think of these tips? Are there any financial moves you are making during the crisis that we have not covered that you would like to share?