There is obviously so much uncertainty surrounding the coronavirus. How bad will it get? Will we all have to be quarantined? Will businesses have to close? Public schools? (Many have closed already). How will it all impact local and global economies? Will I lose all of the money I have invested as the markets continue to see all time lows? If you are worried about any of these questions, or your personal finances generally during the coronavirus outbreak, you certainly aren’t alone. It can feel really scary and overwhelming to think of the impact this virus can have on your finances. Here is exactly what you can do to protect your finances during the coronavirus.
HOW TO PROTECT YOUR FINANCES DURING THE CORONAVIRUS:
If you don’t have any savings built up, now is the time to get started. And if you do already have savings, it’s still a good time to keep building your savings up. Start by saving up a month’s worth of expenses (that’s about how long people were out of work in China dealing with the coronavirus. We can likely expect something similar here). From there, work up to 3 months of savings. Then 6 months. If you don’t have any debt to payoff, then you can focus on getting a year’s worth of expenses. Having savings on hand will give you so much peace of mind when situations like the coronavirus arise.
STOP EXTRA DEBT PAYMENTS
If you are in the middle of paying off debt, i.e., making extra debt payments each month, it’s time to press pause on those aggressive debt payments to protect your finances during the coronavirus. Simply put the money you would have spent on debt payments towards savings if you are still earning a paycheck during this period of time. If you aren’t earning a paycheck (for example, your business is closed during the coronavirus outbreak) don’t sweat it. Make your minimum payments and know that you’ll be getting back on track once things are up and going again in a few weeks.
In addition, you can protect your finances during the coronavirus outbreak by reducing your spending. If you already have a budget, take a look at it to decide what things you can do to reduce your spending. For example, maybe you usually budget $100 for eating out each month. Since you should be practicing “social distancing” anyway, it would be a good time to reduce your spending in your eating out budget.
If you aren’t using a budget, it will be harder to track which areas of your budget you can and should be reducing spending, but you can certainly use good common sense here. Conserve energy by turning off lights and your A/C or heat. Buy generic brand products as opposed to name brands. Don’t buy a bunch of trendy clothes or shoes right now. You don’t have to have a picture perfect budget to use good common sense and reduce spending. I personally don’t love following an extremely strict budget. You can read more about our Easiest Budgeting Method Ever here.
EARN EXTRA MONEY
Earning extra money is a great way to protect your finances during the coronavirus. You might find yourself out of work for a few weeks while our nation tries to stop the mass spreading of this crazy virus. Or perhaps you just need some extra money to get your emergency fund going. Here are 30+ ways you can make some extra money if you need ideas. If your not able to get out of the house, here are ways you can earn money without a job.
USE YOUR TIME WISELY TO PROTECT YOUR FINANCES DURING THE CORONAVIRUS
This is a pretty unique time in history where you may be quarantined or at least asked not to come into work. Use this time wisely! Think through business ideas. Read self help and or personal finance books and blogs. Spend time with your family. Get creative with ways you could earn money besides your current 9-5. Polish up your resume if you are considering a job change or if you are being let go during this time.
DON’T TOUCH YOUR LONG TERM INVESTMENTS LIKE YOUR 401(K)
One smart thing you should do (or rather not do) to protect your finances during the coronavirus — don’t touch your long term investments right now if you have any. The market doesn’t look great today. People are hyped up over the virus and doing crazy things. The market will inevitably recover and you’ll be glad you kept your investments right where they belong instead of taking them out and losing money and taking a hit during tax season.
CREATE A BUDGET IF YOU DON’T ALREADY HAVE ONE
Another thing you should do to protect your finances during the coronavirus is to set a budget if you don’t already have one. It doesn’t have to be anything complicated. It can be as simple as limiting your overall spending to a certain amount per month. But having a budget is key to living within your means, which will help you build up your savings. pay off debt, and become financially secure, which is what you need during times of financial crises, such as the coronavirus.
KEEP UP PREVENTATIVE CARE
A surprisingly good way to protect your finances during the coronavirus is to do a good job of keeping up with preventative care and maintenance. Need an oil change? Go ahead and get it. That’s going to be way cheaper than fixing your entire engine that could die on you if you don’t change your oil. Suspect you have a cavity? Go to the dentist now! Getting a small filling is MUCH cheaper than a root canal or crown which is what you’ll need if you wait too long to get it fixed. (And hey, dental offices are some of the most sanitary/hygeinec places on earth). Keeping up on preventative care and routine maintenance will save you a lot of money in the long run, so keep it up even under these crazy conditions.
STAY CALM TO PROTECT YOUR FINANCES DURING THE CORONAVIRUS
One of the most important things you can do to protect your finances during the coronavirus is to simply stay calm. Don’t do anything rash like take all of the money out of your bank account and buy gold. Don’t spend all of your money online shopping at home just because your bored or feeling stressed. Stay calm and know that this situation will inevitably pass. Freaking out doesn’t do anyone any good. Take deep breaths, have a bath, go for a jog, or do whatever you need to do to reduce stress and stay calm.
Trust me when I say I know times like this can be worrisome for all of us financially given all of the uncertainty around the coronavirus. We own our own businesses and have no idea if we’ll be forced to shut down in the coming weeks or how all of this will impact our finances. But, by focusing on building up our savings, earning extra money, reducing our spending, and above all, staying calm, I know eventually things will work themselves out.
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