May 1, 2020
Finally, Something You CAN Do During COVID-19 – Take Charge of Your Money
Don’t go out. Don’t touch your face. Don’t gather. Let’s face it, during the COVID-19 quarantine, we’ve heard about a lot of things we shouldn’t do. Frankly, it’s left many of us asking one very important question: What can we do?
Well, when it comes to managing your personal finances, the answer is… a lot.
Here are five smart financial moves you can make now to take control of your money today – and in the future.
- Stick to your plans. This whole pandemic thing is new to us all and makes us wonder what we should be doing with our money. Should we take out cash? Leave the stock market? Not move forward with our plan to buy a house?
Well, prior to COVID-19, you may have had plenty of short-, mid-, and long-range plans. Maybe you wanted to build savings in the short term, buy a car in the next few years, and save for retirement down the road. David Morticelli, Vice President at Avidia, advises you not to abandon those goals. “You may have to alter the money you allocate toward them, but you should continue to work toward your goals. It’s a lot like playing a game of ball on a rainy day. Your goal is still winning, but you may have to alter your game plan a bit to adjust to the rain,” said Morticelli.
- Create a budget. Budgeting your money is always important, but if you’re dealing with reduced pay, it’s critical. Take the time to revisit the budget you have. If you haven’t yet created one, now is the perfect time to do so (you just so happen to have extra time). Look for ways to cut unnecessary expenses. “If you’re having trouble making payments on some of your loans, such as your auto loan or credit card, ask your lender about possibly deferring payments for a few months,” said Morticelli.
- Take advantage of technology. Technology has its benefits. Those who use technology to file their taxes learned that firsthand; they were the first to receive their federal stimulus payments. Technology can make managing your money easier. Services like mobile and online banking let you manage your money and pay bills, anytime, from home. And, they don’t conflict with social distancing rules or require you to put on “real clothes.” Morticelli advises you to take advantage of other technology services, such as mobile wallet, which allows you pay for things using your smartphone. “It’s convenient and safer than shopping with cash, since you don’t have to touch money,” said Morticelli.
- Build an emergency fund. With the high cost of things today, many of us have been living paycheck to paycheck. COVID-19 has taught us all the importance of having emergency savings to help us manage unexpected financial challenges. Experts recommend having anywhere from six months to a year’s worth of expenses saved. Morticelli recommends starting small if you don’t have a lot of money to save. “Start by saving enough to equal one paycheck, then work up to a few more.”
One way to make saving easy is to save automatically with direct deposit or automatic regular transfers from checking to savings.
- Teach your kids about money. During COVID-19, many parents are teaching class at home. One subject that needs to be taught right now is money. “Kids learn from watching their parents. Having honest, age-appropriate discussions about money can really help kids develop good financial habits,” said Morticelli. He advises parents to talk to kids about the steps they have taken to prepare the family for COVID-19, such as saving money or budgeting. “Encourage your kids to talk about the steps they can take to prepare their finances, such as putting aside a portion of their allowance for saving, or waiting a little longer to buy that new bike they wanted.”
Learn more about financial literacy for kids.
Take control of your money today. You can do it!
Sure COVID-19 may be dictating where you can go and what you can do right now, but, it can’t stop you from taking control of your finances today – and in the future (when you can touch your face again).