The international COVID-19, or coronavirus, pandemic is something that most of us have never experienced before. It’s impacting almost every aspect of our lives right now – from our social activities, to our jobs, to our shopping and spending habits, to the stock markets. And it may leave you concerned about your finances.
We know how to prepare for many of life’s unexpected moments, but this unprecedented scenario can lead to a lot of confusion and fear. We see parts of the U.S. and other countries, like China, Italy and Spain, putting all citizens under quarantine in an attempt to protect public health and slow the spread.
While a lot may feel as if it’s out of your control right now, implementing a plan with your finances may help you feel more confident as we look toward potentially turbulent weeks and months ahead.
Take these steps to help prepare yourself for the future in the best way possible:
Take A New Approach To Your Finances
If you’re like many Americans, you’re most likely sitting at home right now. Whether you’re staying home by choice as part of social distancing, or you’ve been forced to stay home due to a local mandate, you’re doing your part to flatten the curve of the coronavirus spread.
Some people in this situation may find themselves with an excess of free time. Even if you’re still working from home, you’re saving the time you would have normally spent commuting. And if you can’t partake in the same social activities you’re used to, you may end up saving money as well.
This is a great time to sit down and take a look at your finances. Do you have a budget? And if so, what does it look like? Are you using automated payment systems to automatically pay your bills – such as utility, cable, credit cards, and insurance? Doing so can help ensure you always pay on time and have one less thing to think about during this stressful and uncertain time.
Bill payment isn’t the only thing you can automate, either. With Academy Bank’s Saving Cents, your purchases will be automatically rounded up to the nearest amount of your choosing. The extra dollars or cents saved are added to your savings. It goes for online purchases, too — so even if you don’t leave the house, you can save while shopping online.
Consider Ways To Support Small Businesses
There are very few people who aren’t affected at all by the coronavirus pandemic, but small businesses are among those taking a huge hit.
According to CNBC, 75 percent of small business owners are very concerned about the economic impact of COVID-19. And nearly half reported reduced demand for their products and services. This situation is certain to change as the coronavirus outbreak continues spreading in the United States.
In each of these states, they make up more than 99 percent of all total businesses. That means there are a lot of people feeling the impact.
So, how can you help?
Even if you can’t visit your favorite local restaurant or boutique, you may still be able to help. Many offer purchases online for pickup or delivery. Another way to show support is to purchase a gift card to use at a later date.
Once movement restrictions are over, you can redeem it. That way, the small business can benefit from your purchase now, and you can benefit from their products and services later. On top of that, you’ll be helping support your local economy.
Don’t Be Spooked By The Markets
The economy is one central worry for many people in this uncertain time. You’ve probably heard by now: Stocks have been falling rapidly. The Dow experienced its worst day since 1987, also sending it into a bear market for the first time in a decade. The S&P followed shortly after.
While this may be enough to cause some unease, experts recommend against making any rash decisions when it comes to your investments. As an economic policy writer for The Atlantic put it: “Wash your hands. Ignore the markets. Don’t touch your face. And don’t touch your stocks.”
MarketWatch provides some tips and reminders for investors who may be concerned about the current state of the markets:
- Do not panic.
- Develop a plan.
- Bear markets have some of the sharpest rallies.
- Use the rallies to build protection.
- There is potential for good news in many ways.
Leave Your Retirement Accounts Alone
Just like you shouldn’t touch your stocks – or your face – you should also leave your retirement accounts alone. You already know that withdrawing money from a 401(k) or IRA retirement account can lead to early withdrawal penalties, and in some cases, tax payments.
History can provide a lesson. According to Forbes, during the 2008-2009 recession, workers who did not lose their jobs and did not have to withdraw from their retirement accounts for income were back to where they had been before relatively quickly.
And it’s not only about leaving your money where it is if you can help it. It’s also about continuing to save for retirement during this period of volatility if it’s financially possible for you in your current situation.
Above all, remember, whether it’s your retirement account or your stocks, try not to make decisions based on this temporary situation. Over the long term, the economy is likely to balance out again.
Be Flexible And Hold On During Pandemic
The coronavirus pandemic is uncharted territory. It seems like information is changing by the day. This situation has affected such a large number of people. Our lifestyles have been restricted in a way that we’re not used to, and sometimes it feels like not panicking is easier said than done.
During a situation like this, many of us seek to gain control in certain areas when it feels like little else is predictable. When it comes to your personal finances, making a financial plan and following the above suggestions may help curb some of the uncertainty.
When it comes to your banking needs – in good times and in bad – Academy Bank wants you to know that we’re working hard to be your go-to bank for your financial needs.