I wrote about how to handle uncertain times in the time of a global pandemic over the weekend, but today I want to specifically share more financial steps you can take during an emergency like Coronavirus. There are things you should do with your money to put yourself in a better position!
Only pay debt minimums
Student loan interest is currently paused by the administration and while that is helpful, you should also cut back your debt repayment. If you have been throwing big amounts of money toward debt, now is the time to stop. Only pay your debt minimums when there is an emergency.
Pay only the minimums on your debt and take all the extra money to save toward your emergency fun.
Add to your emergency fund
If you don’t have months of your income saved, now is the time to add to your emergency fund (while you still can, if you still can). You should work to add as much as you can while you have income coming in. We are in a national emergency so you should make this an emergency in your own financial life.
The goal for your emergency fund should be 6 months of expenses, but if you’ve been paying off debt and only have $1,000 because of the advice of certain experts, then you should try to pile up as much as possible. Jobs will be lost and we are likely headed to a recession. Cash will be key and it is best to be on the side of caution.
Negotiate your bills
Some companies will be offering delays or deferrals if things get bad, but you can be proactive and negotiate bills right now to save extra money! You can call and as the provider if there is anything that can be done to lower the bill price overall. If true you should mention you are a loyal customer and never pay late but are thinking of switching. Many companies escalate these calls to teams designed to keep you by offering discounts.
If never hurts to try and negotiating your bills can save you a lot of money every month! This is smart to do any time but majorly important in times of an emergency.
Make or adjust your budget
If you have never made a budget before then you should immediately make one to follow. If you have been budgeting, then you should make cuts and enact an emergency type budget.
You can use apps, a spreadsheets, or my budgeting printables. Or you can write it on paper or a white board. However, you want to do it… make a plan for your money and start tracking where it goes to make sure you are following the plan. Being intentional with your spending is crucial during a downturn or emergency.
Reduce your outings
Due to the nature of coronavirus, staying home and not going out is a way to help the country as a whole make it through this emergency.
Staying home will keep you safe and your neighbors safe, and it will also reduce your spending so you can save more of your money. Savings as much of your money as you can while staying home will help your ability to make it through this emergency.
Save money on groceries
There are a lot of ways to reduce grocery expenses but in these times we all need to also realized many people have gone above stockpiling to hoarding and created shortages as stores. Make meal plans based on essentials you already have and plan your meals around cheap staples like rice and beans (really, Uncle Dave has a point here!).
You can also get discounts like $10 off a $50 Walmart pickup order via my referral link which can help you add up the amount you can buy with your money.
Invest if you can handle it
With all the volatility of the stock market, things are hard for casual investors or those new to investing in the stock market. If that is you or you don’t have an emergency fund, you should do all of the tips above first.
However, if you are debt free with an emergency fund, now is a great time to invest. Stocks are deeply discounted due to panic selloffs and a fear of the recession to come. If you have money around to invest or have been investing already, it is a good time to invest in companies you believe in that you believe will have long futures and growth beyond this volatile season.
If you are looking for invest platforms I like, I currently use all of the following (affiliate links):
- Ellevest (no minimums)
- Robinhood (one free stock for signing up)
- M1 Finance (create percentage based investing pies)
Stay calm and practice self care
The final financial step to take is to stay calm. It can be a very anxious time right now but you don’t need to panic. Follow the best practices for your lifestyle and your money.
Remember to take care of yourself so you are able to stay calm. Exercise. Eat healthy. Practice gratitude. Do deep breathing. Stretch and do a yoga routine. Take care of yourselves!
Mary is the founder of Pennies Not Perfection where she shares her journey to build wealth through online income. She quit her day job in 2021 after she paid off her debt and doubled her 9-5 salary.
Mary's favorite free financial tool is Personal Capital. She uses their free tools to track net worth and work toward to financial freedom.