Experts share tips on emergency-proofing your finances, reevaluating your budget, and long-term planning.
The coronavirus outbreak has caused investors to liquidate stocks, lay off workers, and close local businesses. Many Americans question what to do with their money. Here are some financial tips.
1. Check emergency fund
If you have an emergency fund, save three to eight months of living expenses, not discretionary spending. If you don't have emergency funds, try a high-yield account. Even $10 a week is something.
2. Think long-term for other investments.
Don't touch your systems for pension savings. If you're decades from retirement, you'll likely recover.
If you're contributing to retirement but need an emergency fund, try cutting back just enough to obtain your work match and saving the rest in cash. NerdWallet's personal finance expert recommends keeping investments if possible. "Changes shouldn't be made unless necessary."
3. Know what you owe and make a payment plan.
Make a plan to repay your debts. Palmer advised calling your employer about high-interest credit card debt. Palmer: Credit card firms are waiving interest.
If you can't pay off debt, avoid accumulating more. If possible, simply spend cash to avoid extra debt. The recent Fed rate drop may make paying down your debt cheaper.
4. Reevaluate budget
Amanda Clayman, Prudential's Financial Wellness Advocate, says emergencies can affect your money perspective. "In a crisis, our ability to predict and plan is compromised," she said. We spend and earn money differently than in your "normal life"
Rethink your spending. You may not be going to bars or getting manicures, but you should spend more on groceries. New budget to reflect modifications.
5. Take a deep breath
The world may be falling apart, but it will pass. Have self-compassion. Clayman suggests diverting financial anxiety into a giving activity (or even yourself). When we give, we feel abundant and don't experience lack, she remarked.
Cherish every day and your life will be magical
(Article source: Worried about money? Here are 5 tips to weather the financial storm)
