Jeffrey Meiler shares his view on “navigating finances during the COVID-19 crisis.”
Through the ongoing COVID -19 crisis, we are committed to providing you with the resources you need to navigate through this difficult time. Here are some thoughts from Jeffrey Meiler, CEO of Marlette Funding, developer and operator of Best Egg Personal Loans platform, on how to manage your finances when the market is uncertain.
With everything going on in the world right now, it may be hard to have a handle on what we should be doing to make sure we are protecting ourselves and our families during this difficult time. Economically, we are most likely entering uncharted territory that we have not had to deal with before. As the team at Best Egg navigates through this situation as well, we remain committed to being a resource for our customers who may be unsure of what they should be doing at this time and how they can best prepare for the coming months.
Beyond the health risks and fears that are reverberating throughout the country, many people are experiencing deep financial disruption. This is different from other economic disruptions in that regard, as it is sudden and significant. It is our hope that the recovery from the COVID-19 outbreak will dissipate as quickly as it came once we are able to contain its spread, although no one knows for sure when that will be. What we do know is that everyone should be prepared to keep themselves above water for the next 45 to 60 days at least. We understand this is easier said than done, so here are some tips on how to manage finances throughout this time:
Create or revisit your budget
It’s critically important that you have a firm understanding of your financial needs each month. Start with listing all of your essential expenses like rent, mortgage, utilities and insurance. Be careful to capture expenses that you may pay on a less frequent basis like quarterly or annually. Then review your other expense obligations like loans and credit cards to understand your minimum monthly payments. Finally, calculate your discretionary spending, recognizing that during this stay-at-home time, your discretionary spending may be considerably lower than your ordinary discretionary spending. Next calculate any and all sources of income you will receive each month. Subtract your expenses from your income to see your excess or shortfall each month. If you find that you have a shortfall, here are some additional actions you can take.
Review savings or emergency funds
Compare your monthly income shortfall to your savings or emergency fund balances to determine if you can cover any shortfall and for how long. Take note of unused credit lines on credit cards or home equity lines of credit. If you have a 401K, take note of the balance. You can typically borrow up to 50% of your vested account balance if you are in a pinch.
Communicate with creditors
If you’re in financial distress or fearful you may be, reach out to your creditors and update them on your situation. Our company reached out to customers to let them know we have flexible options to help them get through this difficult time but we want to hear from our customers. We launched a survey to better understand our customer’s employment challenges, family care situation and overall stress and anxiety as we are all new to this situation. Now more than ever, in order to find help, it’s crucial to communicate the difficulties or roadblocks ahead of you, so those who can help, know what you’re going through.
Do your taxes
Though the government has pushed back the tax deadline to July 15th, if you believe you’re getting a tax rebate, now is a perfect time to file your taxes and get that refund as soon as you can so you have an extra buffer during this time.
Consider consolidating debt
Take this time to really look at your finances. How much interest are you paying on credit cards? That number can be much higher than you think. Now is the time to consider paying off credit cards and lowering the number of payments you have and the amount you have to pay.
Stick to what is certain
Some may be tempted to “play the market” as the economy is in flux with the hopeful outcome that they can come out on the other side better than before. That is a high-risk situation and right now, it’s important to be conservative with the financial risks you take.
As always, we want to be a resource for you. Through these uncertain times, we know you may have more questions and we want to help you get the information you need. Keep in touch with us on Facebook, Twitter, and Instagram and let us know what we can do to help. Stay healthy. Stay safe. We will get through this.