Financial Preparation for Coronavirus and Beyond.
The global pandemic has wreaked havoc on the economy, the stock market, and also people's pocketbooks. All around the country people are worried not just about their physical health but also their financial health. What can you do to prepare?
What follows are four actions you can take to get ready for the financial effects of the pandemic. They may not solve all your fiscal issues, but they may help make things easier as the next few months unfold.
1) Turn on autopay.
As if life wasn't complicated enough, along comes a global pandemic that throws our lives into a tailspin. When something like this happens, it affects our daily routine. For some of us, our routine (daily, weekly or monthly) might include monitoring our credit accounts and paying bills.
A glitch in our routine often causes us to forget certain things - like checking our credit reports or paying certain bills. If we forget to pay bills (i.e., credit cards, mortgage, etc.), that could lead to lower FICO® Scores, the last thing we need during these times.
Consider putting these payments on autopay so that you don't have to think about them. Doing this not only relieves some stress (having to remember), but it also ensures that bills will be paid on time, and late payments won't make their way on to your credit report. Make a note to check your balance so that there's enough money in your account to avoid an overdraw.
2) Follow the 6-month rule.
Most experts agree: you should have enough money in your emergency fund 'to cover at least six months' worth of living expenses.
Easier said than done, but it's crucial when times get tough, and income starts to slow down. When figuring out how much money you'll need every month (then multiply by 6), consider the following expenses:
- Healthcare (including insurance)
- Debt owed
- Other personal expenses
Remember, you don't have to do this all at once. It's a good thing if you can, but if you can't, put away small amounts consistently until you meet your goal. As the saying goes, "something is better than nothing."
3) Think smaller.
If you currently live in a large city or metropolitan area, consider moving to a smaller city or the suburbs. Yes, relocating is a big move and takes effort, but there are some benefits of small-town living you might want to keep in mind:
- Smaller cities and suburbs can offer more affordable housing. Depending on where, you can often purchase a house with the same monthly payment as renting a studio apartment in a large city.
- During this life with coronavirus, it's easier to social distance in smaller cities and suburbs—fewer crowds, more open space, trails with fewer people—just another great perk to living a more rural life.
- Talk to your employer about working remotely. Many companies are now reconsidering whether they want to continue leasing office space when their employees cannot come to the office, and they may be willing to let you be a permanent remote employee.
- City living can be hectic. Smaller towns can help decrease stress due to fewer cars on the road, easier parking, less sensory overload and more open spaces.
Do some research to see what other ways you might be able to prepare for your future financial situation. It should pay off in the end.
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