Ways to Maximize Your Finances During CoronavirusFinancial Advice
The impact of COVID-19 has people concerned about our health, personal finances, and our economy’s health.Being home-boundcould affect your both income and your spending during this time.
Not only is the pandemic affecting many individuals, it’s also having a massive impact on the economy overall. At this stage, no one knows when that uncertainty will end, undoubtedly leading to continued market volatility. When faced with financial uncertainty, it can be helpful for investors to have a solid plan of action in order to reduce stress and fear. Having a financial plan empowers you to be prepared for a variety of situations.
Here are some things you could consider planning for during market volatility:
1. Start Saving Emergency Funds
It’s in situations like the one we find ourselves in now that make having an emergency fundso important. Having 3-6 months’ worth of savings can make a big difference during a time when you may not be able to work for a time. Even if you don’t feel like you’re at the point where you can have an emergency fund yet, now’s the time to make a plan.Start by cutting out some non-essential spending for a while to help you start building your emergency savings up.
2. Review Your Spending
If you already saved up an adequate emergency fund, then the next step is to review your spending. There’s something to be said for the way hard times make you think about what really matters to you, which in turn can help you spend more mindfully. Start by combing through your bank and credit card statements and look for things that you’re spending money on that you don’t really need. A few dollars here and there can really add up each month!
3. Refinance Your Loans
In an effort to moderate the effects of COVID on the US economy, the Federal Reserve has lowered interest rates to 0%! With these low-interest rates, this is a great opportunity to save some money by refinancing your debt at a lower interest rate. Consider checking on refinancing your mortgage, student loan debt,or personal loans to save money on interest payments.
4. Maximize Retirement Contributions
Whether your retirement is decades away or fast approaching, it’s important to remain on track with your retirement plan contributions in order to fully maximize your benefits. Historically, stock market downturns are usually followed by a positive recovery. Investors who can continue contributing to their retirement during downtimes have the potential to take advantage of market recoveries.
5. Hunker Down with Investments
Now is a good time to remember that long-term investment goals tend to survive temporary market shifts. Any time you see a swing in the markets and a drop in your account balance, emotions are going to arise, and emotions can cause terrible investment decisions. With so much market volatility, you’re bound to see your balance go down when markets go down. This can make it very tempting to take your money out of your investments during the downtimes, but trying to avoid bad days inevitably means missing the good days.
Regardless of how this pandemic may have impacted your life, it’s always good to review your financial situation in order to make sure they are still on the right track. In the face of enduring market volatility, we will continue to follow our disciplined investment process and monitor our clients' accounts.
As always, we welcome any questions you may have during this time. Reach out to Deb to review your situation and gain some perspective on how your plan is holding up.