Staying financially healthy during COVID-19 times in 5 easy steps.
In keeping with this blog, we will discuss financial aspects of life.
Do not expect medical advice, but we will tweak it.
1- Having an emergency fund now is more important than ever.
Saving 3-6 months worth of expenses is and will be crucial moving forward. You need to have an emergency fund to cover basic day to day expenses in the case you get laid off or furloughed. One thing I advocate is making yourself an asset in your workplace, thereby reducing the risk of job loss. The current prediction is this pandemic will be here for 2 years or more and the way people are behaving, likely longer. Not to mention the possibility of another viral pandemic.
2- Reduce non-essential spending
That Gucci purse can wait. Besides, with the lockdowns and social distancing, who are you going to show it off to? I have done cost cutting myself, like getting my own haircuts, working out at home, and bringing lunch to work. As parents of 2 kids, we have found a number of activities with the kids that they enjoy, are safe and are cheap like joining the local state park and virtual museum tours.
3- Do not get COVID-19 - Avoid indoor gatherings/wear a mask
No one wants to get COVID-19. However, some individuals are acting like they don't care.
You should follow the golden rule of social distancing and mask wearing. If you do follow the CDC guidelines, the chances of getting COVID-19 are very low.
How can this be a financial advice? By not getting COVID-19, you will avoid a possibility of prolonged hospitalization and/or debilitating COVID-19 complications and therefore, avoiding high medical bills and lost wages.
We are not alarmist, however, seeing first hand the prolonged 2-3 weeks admissions to the hospital (that's if you do not die) and the post COVID-19 consequences in the clinic, you want to make sure your productivity is not affected and by default, your livelihood.
Make use of Facetime, Zoom or any other video chat means for communications if you want to gather. If you do still want to gather, do it OUTDOORS and wear a mask. Your most precious asset depends on it, your INCOME. Protect it.
4- Scrutinize your bank/credit card statements
Go over your bank statement at least once a month. See where all the money is going.
You will be surprised to find multiple .99 cent charge to your account. In my case, after digging a bit more, I found out my kids were unknowingly buying games from their tablets! The apps/programs that you have checked out for free, may now be charging you a monthly bill. It may also very well be a HULU subscription is being billed and the last time you watched HULU was 3 months ago.
How can investing be part of the plan when you are telling me to save and hunker down?
If you have job security, a 3-6 month emergency fund, your 401k is maxed out and you have stable housing then the next thing is to invest. One thing I want to remind you is that winter does not last forever.
The current pandemic WILL end. It might not be soon, but it will end and you will have economic growth despite what the doomsday preachers say. In the future, people will likely forget what it was like living these days and all will be back to normal. The economy will recover and new heights of the stock market will be reached. Wouldn't you want to be part of that? Investing now will likely get you exponential growth of your money in the future.
Till next time,
Disclaimer - This blog is meant purely for educational discussion of finance. It contains only general information about financial matters. It is not financial advice, should not be treated as such.