The coronavirus has very quickly changed the financial situations of many people. Many people have lost their jobs, had their pay reduced, been forced on furloughs and more. Fear about the future of our economy looms as our immediate daily lives have been severely restricted — all this while trying to protect our health and the health of those around us.
There are things you can do now to take control of your financial situation and protect yourself against any current or potential negative future impacts of the coronavirus. Keep in mind that during times of panic, we tend to not make the best decisions, so the most important thing you can do is to try not to do anything too drastic. Try not to make emotional decisions about your finances.
Emergency Savings
If you are able, the most important thing you can do right now is to establish an emergency fund. This should consist of enough money to live on for 3 to 6 months and should be put into a savings account. You may want to err on the more conservative side of saving more since we don’t know how long it will take the economy to recover. Therefore, we can’t predict our future incomes very well right now.
50-30-20 Budget
Experts recommend following a 50-30-20 budget. That’s putting 50% of your salary toward needed expenses, such as your rent or mortgage and groceries. Thirty percent of your budget should be spent on wants, such as carryout or takeout (since most of us can’t go out to eat right now) and entertainment. Twenty percent should go to debt payment and savings. Set a budgeting goal on Vitality to help make it easier for you to take control of your finances.
Payments
If you have debts e.g., rent, student loans, etc., reach out to those to whom you owe money. Right now, many creditors are understanding and lenient on payment due dates, and it doesn’t hurt to ask for extensions.
Unemployment
Anyone who has been laid off as a result of the pandemic should be sure to apply for unemployment insurance right away. In most states, you can file online. Visit your state’s government website to learn how. You can also learn more on the usa.gov website. You may also want to consider cutting back on any non-essential expenses, such as streaming services and gym memberships (even if you aren’t going to the actual gym right now).
Stimulus payment
Keep in mind that in the weeks ahead, the government will issue stimulus checks to most Americans. The amount you may receive will be based on your household income and the number of children you may have. You can learn more on the White House website.
401k & Investments
Do not panic. The markets will recover eventually. Now is not the time to make drastic changes to your investments, including your 401k. Consider the big picture and wait it out. Remember the basic premise of investing: buy low and sell high.
Giving Back
If you’re financially able to help those currently in need, you may want to consider doing something kind for those people on the front lines, e.g., ordering meals for them from small local businesses, continuing to pay gig workers such as cleaning services, babysitters and dog walkers (even if they aren’t working for you at this time), or fostering shelter pets while you are working from home. Financial experts often say that giving back is one of the secrets of some of the wealthiest people!
We hope these tips help you manage your finances during this turbulent time. Keep in mind that the most important thing is to stay calm and try not to make impulsive financial decisions based on your current emotions. Things will get better.
Ellen Feldman is UX Product Writer for Vitality Group. She loves skiing, reading, writing, travel, anything on the water and baking plant-based desserts.
