Times are unsettling for many Americans facing reduced hours, changing work functions and uncertain financial days ahead. With COVID 19 spreading, it’s more important than ever to take the reins on your finances and manage them carefully.
With the uncertainty of what's to come, it’s easy to fall into a panic and wonder if there are more steps you should be taking to save your personal finances from impending ruin. Here are some practical dos and don’ts to help you maintain financial stability and peace of mind during this time.
Don’t: Panic by selling all your investments
Both seasoned investors with robust portfolios and those simply worried about their retirement accounts can find it nerve-racking to see their investments drop in value by as much as 10 percent a day. It may seem like a smart idea to sell out just to spare investments from further loss, but financial experts say otherwise.
Most sectors of the economy will recover quickly as soon as the outbreak clears. For example, consumers may not be purchasing shoes or cruise tickets now, but they will likely do so when it is safe to shop and travel again. While the global and national economy may not bounce back for a while, experts are hopeful that individual business sectors will recover quickly.
Do: Trim your spending
The thriving economy the country has enjoyed for a while has prompted a gradual lifestyle inflation for many people. As the economy heads toward a probable recession, this can be a good time to get that inflation in check. Work bonuses, raises and promotions are not handed out as freely during a recession as they were in recent years.
Some people may even find themselves without a job as companies are forced to lay off workers in an effort to stay solvent. Trimming discretionary spending now can be good practice for making it through the month on a smaller income. It’s also a good idea to squirrel away some of that money for a rainy day.
Do: Consider a refinance
The silver lining of an economic environment like this is falling interest rates. Refinancing an existing mortgage at a lower rate can potentially save homeowners several hundreds of dollars a month. That extra breathing room in a budget can be a real benefit in case of salary cuts or even a layoff during a recession.
Be sure to work out the numbers carefully before considering this move since a refinance isn’t cost-free. You can speak to a Mortgage expert at Genisys Credit Union to learn about your options.
Do: Consider Short-Term Loans vs. Credit Cards
Finally, your credit union remains dedicated to helping the community grow, particularly in trying times such as these. A short-term, personal loan is a great option to help you get through, rather than using traditional credit cards that offer revolving credit at alarmingly high-interest rates.
Short-term loans have set payment terms and are easier to repay than credit cards and payday loans. Not only will you pay less interest, but you’re likely to repay the debt much faster than with credit cards, too.
The coronavirus has already impacted the economy tremendously, and will likely continue to do so for a while. Keep your own finances safe by remaining calm, putting your health first and taking some of the practical steps mentioned above.
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