Practical COVID-19 Finance Tips from a CFO
Fear and uncertainty are what most people are dealing with emotionally and financially these days. Control over many aspects of life has been taken away or changed. There are not a lot of options at this point, other than to abide by directives from the government and do our part. Your financial situation may have changed, and you could be wondering what to do now, or maybe it hasn’t changed and you’re wondering if your emergency reserves will hold up.
If you’re one of the many that has found themselves unemployed, look to see if Fannie Mae or Freddy Mac own your loan. You can possibly get your payments deferred for up to 12 months. If they do not own your loan, talk to your lender to see what your options would be.
Ideally, you should have enough in cash reserves to last several months. However, reality is that many Americans do not. Below is a list of a few practical things to help build up cash reserves during this time:
- Hit pause on your goals to make sure you’ve got enough in reserves. Reallocate dollars you were putting towards these goals into your cash reserves.
- Pay minimum payments on everything in order to build up cash reserves.
- Research to see if you can put your student loans on deferment if you get to the point where you need to.
- Cancel unnecessary subscriptions.
- Look at ways to lower your fixed expenses.
- Eat less
- Shop for better insurance, cell, and internet rates
Many people go into panic mode and make decisions that could be detrimental long-term or harm short-term cash reserves. The following list are some things to try and avoid doing, unless absolutely necessary.
- Do not sell investments or pull from your retirement accounts. There are many taxes or penalties that could be associated with doing so.
- Do not spend too much on supplies you won’t use. Grocery stores are still open and hoarding isn’t good if you do not have a surplus to work with.
- Do not resort to credit cards unless it’s a last resort.
- Do not try and time the market unless you can afford to lose the money you will invest.
We live in a wonderful community and there are many resources available. I’ve seen free food supply pick up points at Kaufman Realty and Harvey’s Market. There are local companies like Love INC that can assist individuals to find the aid they need. The website listed below has a vast array of information that is very helpful in navigating various areas of your finances. They have links or information on taxes, utilities, internet, cellular, food, unemployment, housing, childcare, small business, college students, service members, seniors and more.
Please go out and educate and prepare a plan during this time. Try not to react out of fear and the unknown.