By Pam Reiss
As the world continues to cope with the COVID-19 pandemic, life as we know it has come to a grinding halt. Millions of us are working from home, our children are getting their schooling through videoconferencing, and our normal social and sports activities are in limbo.
Unfortunately, the situation can create some uncertainty around how to manage financially. Whether you’re currently working or not, it’s very likely you’ve been thinking about how to manage your finances during this time. The good news is at least some typical spending has naturally been cut because we’re all staying at home. But, there are many ways you may be able to keep your financial situation as stable as possible and stretch your budgets a bit.
Takeout vs. cooking – Ordering takeout or delivery is a great way to support local businesses during the crisis, but if you need to cut your spending, since you’re at home anyway, try limiting how often you order out. Instead, enjoy more home-cooked meals. There are many resources online for inexpensive, healthy meals. You can plan your entire week’s meals, make a complete shopping list, and make just one trip to the grocery store. You can even have one night of the week reserved for leftovers. If you want to continue to support a few local restaurants, set aside one or two days of the week for that.
Buy what you need – We’re still able to go to the grocery store, despite having to follow public safety guidelines. If you initially stocked up on non-perishables or frozen items, start using those instead of constantly buying more. Also, when you’re at the grocery store, there are still many items on sale each week. You can check out your grocery store’s flyer online to see what’s on sale, and plan your meals for the week accordingly.
Other ways to save – Take a look at some of the other things you’re spending on each week and see where you can cut a little out of your budget. Things to look at include video services. If you’re a cable subscriber, you might think about switching to a lower service tier, at least temporarily, or if you have multiple streaming services, consider cutting one of more of them. The monthly savings can add up quickly, and you can certainly find other ways to entertain your family.
Low interest rates – With interest rates dropping, this may be a good time to look into refinancing your mortgage or student loan, or even consolidating multiple loans. While there will be paperwork involved, lower interest rates can provide significant savings each month.
Emergency fund – If you’ve been following good financial habits and have built up an emergency fund, don’t automatically fall back on it. First take a look at ways you can reasonably adjust your spending. Then, if you find you need to dip into it, you can hopefully use just a little of it. If you’re fortunate enough to be working, this is a good time to add to or start your emergency fund. Since at least some of your normal extracurricular spending has been put on hold, consider putting that toward your emergency fund. You never know when you’ll need it.
Investment funds – It can be difficult watching retirement accounts and other investments lose money with the current market instability. The good news is they have historically bounced back reasonably quickly. Before you move or sell your investments, talk to your financial advisor, who can give you advice on whether it’s a smart move or not. Making a rash decision could actually end up hurting your investment funds.
Protect your credit – If at all possible, continue to pay your bills on time. If you’ve been using your credit cards, at the very least, pay the minimum on those to avoid hurting your credit score. If you are in a situation where you can’t pay some of your bills, contact your lenders. some lenders are allowing extra flexibility with payment terms or interest rates to help during the pandemic. You should also check your credit reports regularly. Fraudulent activity often increases during crises, and consumers and businesses are under a constant barrage from cyber criminals. Be extra cautious with emails, websites, and phone calls. There are thousands of malicious COVID-19 websites out there, and many phishing emails and phone calls looking to exploit uncertainty and fear.
The good news is most of the financial resources you normally have at your disposal are still available, though not in an in-person capacity. But, you can still contact us if you need advice. Even though we’re all dealing with this pandemic, you can do things to help keep your finances in order and limit any long-term impact.