Riding the COVID-19 Financial Rollercoaster: 4 Critical Safety Rules
- The economic implications of COVID-19 are yet to be fully realized, so it is important to practice calm but diligent realism.
- Now is a great time to finely comb through non-essential expenses like subscriptions you use infrequently or can live without for a few months.
- Consider keeping all the cash you can on hand and stop paying extra on debts for now.
First and foremost, to all of you on the front lines in the medical field, public safety, and public health, a heartfelt thank you for all you are doing to protect and provide meaningful information to the public.
Times are so strange right now. Here are four quick thoughts about navigating the financial implications of COVID-19.
Put Your Oxygen Mask On First
The economic implications of COVID-19 are yet to be fully realized. Many of us are out of work or are trying to keep businesses afloat. At a time like this, it is important to practice calm but diligent realism.
Now is a great time to finely comb through non-essential expenses like subscriptions you use infrequently or can live without for a few months.
Consider keeping all the cash you can on hand and stop paying extra on debts for now.
Tip on Navigating Debt Repayments: If you have to make strategic choices, pay secured debts (debts with a “thing” attached to them like a mortgage or car loan) before unsecured debts (student loans, credit cards, and other debts with no collateral). Better to pay extra student loan interest than have a car repossessed. Speaking of student loans, hello to hardship deferrals.
As the saying goes, "secure your oxygen mask before helping others get theirs on." If you have the disposable income to use other services, that could be an EXCELLENT way to support entrepreneurs and local business owners through this.
However, be honest about whether or not you are putting yourself at risk financially to do so.
If you are or anticipate living off of savings, keep using the non-critical services and products you love if you have enough cash reserves to cover your essentials until July 2020, without going into debt, if you don't see another paycheck before then.
If you are not in this position, focus on maintaining your household, and you will end up in a better position to help our beloved local businesses and creatives recover in the long run.
Do Not Jump Off The Moving Roller Coaster
In a few short weeks, stock values have dropped so significantly; most of our investments and retirement accounts are worth less than what they were back in 2017.
Ride out your fear. Do not cash out.
Cashing out during an economic downturn like this is the financial equivalent of unbuckling your seatbelt and jumping off of a moving roller coaster because the next loop de loop you saw coming freaked you out.
Injury is guaranteed if you jump. Safe completion of the journey is most probable if you stay put and just cover your eyes.
Control What You Can Control
It’s amazing that the CDC had to retrain (some of) us to do this, but for the sake of humanity, wash your hands!
Create ways to exercise and eat nutrient-rich foods, even if your budget and availability will not allow for a wide variety.
Be proactive about connecting with friends and loved ones over video calls. Combating loneliness and isolation is the most urgent challenge of all.
Leverage free online concerts, webinars, courses, and live Q&A sessions going on around social media.
Do not give in to the temptation to blow off work and binge on Netflix all day. Keep your mind active by creating a productive work and creative space at home.
Keep Hope Alive
I am convinced some of the best breakthroughs in business, arts, and education will come out of this season from people who find ways to stay engaged.
And I am also convinced we will come out of this stronger than ever if we practice kindness and support each other.
How are you navigating COVID-19? Please share your thoughts, questions, and emotional outbursts in the comments below.
Wash your hands,
Kim Wren is an Atlanta based financial coach and podcast host. Visit her website at TheMoneyFreedomMovement.com and find her shenanigans on Instagram.