How to Reduce the Impact of Coronavirus on Your Personal Finances
We are living in unprecedented times. Coronavirus has no doubt changed the history of the world as we knew it.
As we are hunkering down in our homes for the foreseeable future, many are wondering how the global pandemic will impact their life. From stores running out of toilet paper, to shelves being completely empty at grocery stores, this will make each of us think about what resources are truly valuable, and how we each contribute to making the world go ‘round.
The topic of money will no doubt be a hot one. With many companies closed or conducting business remotely, employees’ paychecks are already being impacted, along with companies’ bottom lines. While I see many positives that can come from this, we first must weather the storm ahead.
I’ve compiled a resource guide to help you, your money, and your small business during these unprecedented times. In addition, here are 5 steps you can take to get your money in order right now.
Five steps you can take to get your money situated for what’s to come.
1. Save More Money
First, the more money you can save right now, the better. Many people may not be able to work in the coming months, or experience reduced pay. Make a list of your essential expenses and cut what you don’t need or won’t use right now.
I recommend always keeping 3-6 months of essential expenses saved in what I call a Lighthouse Fund. Once you have fully funded this account, it will just sit there and earn interest. It is meant to pay your essential bills in the event you aren’t able to work, or need to take time off work. Consider saving an additional three months right now.
2. Pay the Minimums on Your Credit Cards
The next thing to do with your money right now is to continue making on-time payments to your lenders. This will preserve your good credit, enabling you to get the best rates possible for future loans. Make your minimum payments and do not pay anything more. Stockpile extra money that would have done toward debt in your savings account.
3. Get a HELOC
Third, if you don’t already have one, now is a great time to get a Home Equity Line of Credit. This is a line of credit drawn on the equity in your home, usually at an interest rate much lower than a credit card. Whether you use it or not, it’s nice to know you have it just in case. As my mom always says, “It’s good to get money when you can get it, because when you need it, it’s harder to get.”
4. Do Not Sell Your Stocks
Now is the worst time to liquidate retirement or investment accounts. If you do, you will solidify your losses. The market will recover. Right now your dollars can go even further in the market, so do not be emotional and stay the course.
5. Earn More
Finally, now is a great time to start thinking about how you can add an additional stream of income to your life. One impact Coronavirus will have on the economy is to create more work from home and remote income opportunities than ever before!
What do you love to do? Combine your passion with income and get paid to do something you enjoy. What are your unique skills, personal interests, and current resources? How can you use them to make money? Or, consider how you can contribute to helping the world in these new times.