It’s okay to feel nervous about the economy right now. At local, state, federal, and global levels, economists are bracing for impact from the COVID-19 outbreak, and it’s hard not to get overwhelmed. The fact is however, this is not the first time we have faced economic disruption. While COVID-19’s impacts are unprecedented in some ways, there are financial moves that could help you right now to brace for the next couple of months of uncertainty.
Here are 7 financial moves you should make right now during the COVID-19 outbreak
1. Prepare Your Finances
The most important financial move you can make right now is to understand your current finances. Take a moment to review your financial documents with a fine-tooth comb. Managing your finances during a crisis is not easy, but knowing what you have and where it’s going is the first step to weathering rapid economic change.
Revisit your budget
We often think of a budget as something to set and forget, but creating and actively managing a budget is essential to navigating financial uncertainty. Make sure your budget is covering everything that is coming in and where it is going out. Reviewing your budget can also prepare you to identify where you could reduce expenses if you need to in the future.
Know Where You Stand
In addition to being clear about your day-to-day finances, take some time to know what your overall financial situation looks like:
- Evaluate your savings and retirement assets
- Check your latest investment balance
- Review a copy of your credit report
- Calculate your debt-to-income ratio
Reset your financial goals
Now is the time to reassess what you’re doing to reach your financial goals. It’s not time to shut everything down and hide your money under a mattress—but it important to make sure your priorities are in line with your financial goals.
If COVID-19 has impacted your finances, be sure to adjust your financial goals to make sense for your new normal. You may have to change how much you’re contributing to a savings goal or change what you were intending to use a savings for. By tuning your financial goals now, you’re ensuring you still set yourself up for success in reaching those goals, even if they are delayed or changed in the near-term.
2. Know Where to Go If Things Go Wrong
The second move to make is to get familiar with the resources that are available to you. If disaster strikes, it can be helpful to have an idea of what to do and where to go for help. Here are a few ideas to do your research on so you’re more prepared for any financial hurdles that COVID-19’s impacts may throw at you:
- Know how to handle medical bills and manage medical debt
- Understand your state’s qualifications to qualify for unemployment and its contact information
- Find resources to help you grow professionally
- Know what relief opportunities your banks and other financial companies are offering
- Get familiar with what your lending options could be if you need it: State or federal relief, any existing credit lines you may have, or borrowing from your 401(k)
3. Prepare for Economic Turbulence
Economic experts predict that the world economy may fall into a recession, in part caused by the impacts of COVID-19. Many in the US were severely impacted by the Great Recession of the late aughts. This is why it’s understandable why fears of another recession are causing a lot of anxiety right now.
There are a few basic steps you can take to prepare for a possible recession, including:
- Paying down your debt
- Increasing your savings
- Adjusting your investment portfolio closer to your risk appetite
- Reducing your expenses to only the essentials
While these four steps may not shield you from all of the impacts of a recession, they are some of the best ways to position yourself to come out still standing.
4. Keep Calm & Stay Up-To-Date on the Latest News and Relief
Developments around COVID-19’s economic impacts are happening around the clock. There are a lot of people at work right now trying to figure out how to keep economies stable. This means that more programs and relief opportunities may still be on the way.
Keep your eyes open for any opportunities to access relief. In addition to your financial and utility companies, you may qualify for relief from the federal government, your state, your county, and even your town. Also, make sure you’re taking advantage of every opportunity to save on bills, groceries, and any other essentials you are paying each month.
As much as you can, stay connected to the news, check your mail and email. This is how you may be able to learn about how your financial institutions and other companies you do business with are offering assistance.
But just as important: Remember to take care of yourself and your family. Now more than ever, we should stay connected to the people that are most important to us.
We are all stronger when we stay united and help one another where we can. Here’s to making moves that strengthen us, our families, and our communities.