Financial Dos and Don’ts During the Coronavirus Outbreak
Since the coronavirus has landed on American shores, each day seems to bring more devastating news about the state of our economy. With all this uncertainty, it’s easy to fall into a panic and wonder if there are some concrete 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.
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 previous 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.
Don’t: Put your money before your health
Financial wellness is important, but physical health should always take priority. If you’re feeling unwell, and especially if you’re exhibiting any of the symptoms of the coronavirus—such as fever, coughing and shortness of breath—call in sick to work. Do the same if you’ve been exposed to someone who has tested positive for COVID-19 in the past 14 days. Don’t let financial considerations come before your health and the health of those you come into contact with each day.
Do: Consider a refinance
The silver lining of an economic environment like this is falling interest rates. Interest rates are currently low, and refinancing an existing mortgage at this lower rate can potentially save homeowners several hundreds of dollars a month. That extra breathing room in a budget can be helpful 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 call us at 831.479.6000 or toll-free at 888.4BAYFED to learn about your options.
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. According to The Motley Fool, 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: Contact your creditors
If you are facing financial hardship, please contact your credit union and/or other creditors to determine what solutions may be available to help. We are creating programs to help members stay afloat, and other creditors may have their own programs in place. You can also call us at 831.479.6000 or toll-free at 888.4BAYFED to learn more about how we can help you.
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.