There’s no rulebook for navigating life during a global pandemic—from grocery shopping to dealing with job and healthcare insecurity, these are truly unprecedented times. For many people, one of the biggest stressors is figuring out how to manage their finances in the midst of such uncertainty. With unemployment on the rise, many American workers are unsure if they’ll get their next paycheck, which can make financial planning nearly impossible.
Whether or not your income has been affected by COVID-19, there are several things you can do to keep your finances in order. Check out these tips.
The first step in wealth planning, pandemic or not, is taking an inventory of your assets and income. By keeping track of what money is coming in and what assets you can liquidate, you’ll have a clearer picture of your financial situation.
If you’re unsure if your income will be affected by the coronavirus, still tally up your current income. To be safe, consider estimating your best- and worst-case scenarios so that you can come up with a plan for each circumstance. In the event that your income is either reduced or eliminated completely, you’ll still want to have a handle on which assets you can leverage to make ends meet if you need to.
Whether or not your income has been impacted, you may want to consider adjusting your budget anyway. It’s almost never a bad idea to prioritize your savings, but during a time of economic chaos, it’s all the more important.
To reset your budget, follow these steps:
Chances are, you’re already cutting back more than you realize since so many restaurants, bars, and other shops have shut their doors, but taking a moment to be intentional about how and where you spend can be immensely helpful in your planning.
However, let’s not forget that it’s still important to do what you can to support the economy, especially the one in your own neighborhood! Consider supporting local businesses in your area by ordering delivery, buying gift cards for later (get your holiday shopping done early), or contribute to staff relief funds.
Speaking of relief funds, the federal government has implemented several relief options for those who have been negatively impacted by the coronavirus. The CARES (Coronavirus Aid, Relief, And Economic Security) act and $2 trillion stimulus package was signed into order by President Trump earlier this month. CARES help provide most American workers with some amount of compensation funded by the federal government.
If you needed some motivation to file your taxes this year, it’s worth noting that the government uses your tax return information to issue this check. While it may be tempting to spend your CARES check, individuals should be mindful of the best way to spend their $1200 stimulus check.
If your income has been minimized because of the pandemic, you might look for opportunities for supplementary income in whatever capacity you can. Industries across the globe have been negatively impacted by the virus but finding some opportunities for income is still worth a try! If you have a professional skill such as graphic designing, writing, or development, you may be able to find freelance work online that can help tide you over for a while.
Other industries that are hiring include healthcare, emergency services, and grocery stores—just keep in mind, these essential workers are taking on substantial risk by interacting with the public on a daily basis.
Ultimately, as you find ways to manage your finances in the present, you’ll also want to prepare for the future. What will you do if you lose your income? What about if your spouse loses theirs? Is your landlord willing to be flexible about rent in the current climate?
These are tough questions to ask, but they’re essential to creating a financial plan that can weather the unknown.
Financial planning is tough to do in normal circumstances, so be patient with yourself and don’t be afraid to solicit professional help!