Finances in Uncertain Times
Jul 31, 2020
Ever since the pandemic hit, the economy can feel like a wild rollercoaster ride. Some days it's smooth sailing, while other days it can feel on the brink of a major crash. If you're feeling stressed about your financial security, you certainly aren't alone. But there are still smart money moves you can take to help stabilize your finances. Here are some steps you can take to protect your money in uncertain times:
Rework your budget accordingly. When your financial security is unsteady, that's the time to look closely at your income and expenses over the last few months. Is your spending outweighing how much you make. If so, look for where your money is going and find opportunities to cut back on discretionary spending. Depending on your skill set and free time you may also be able to take on another job so you can better afford your expenses.
Trim your bills. Make a list of upcoming large expenses and consider if any of these purchases can be postponed. Contact your utility providers to find out if they allow people with financial hardship to skip their next payment. Plan your meals a week at a time and cook in large batches to minimize your grocery and takeout bills. Consider downsizing or dropping the features you don't need for TV, phone and internet. You may be able to temporarily pause service for a few months to give your budget a break.
Ensure you have emergency savings. Having an emergency savings fund can be a lifesaver. With three to six months, worth saved up for emergencies, you could avoid racking up credit card debt or cashing out retirement accounts to pay the bills. Think about how you might stretch your emergency savings to last for a longer period of time, if needed.
Be wise with credit. When money's tight, it's tempting to use credit cards to get by for a few months. However, charging debt that you can't afford to repay can damage your credit score, making it harder or more expensive to borrow money in the future. If you rely on credit cards or other loans in a financial pinch, have a plan ready to repay the debt and keep up with minimum payments (or more) each month, if possible.
Find financial relief, as needed. In the wake of the COVID-19 pandemic, state and federal governments began offering a larger array of benefits to people experiencing job loss and financial hardship. Depending on various factors, you may be eligible for multiple benefits related to unemployment assistance, health care and nutrition. Discover the benefits you could receive by visiting benefits.gov/benefit-finder.
Think long term. Are you worried about wild fluctuations in the stock market? If anxiety about your investments is keeping you up at night, it's a sign you should revisit your risk tolerance and review your accounts with a financial advisor. However, if your risk tolerance and goals are unchanged, then you may want to stay the course and ride out market volatility.
Talk to a financial counselor. Whatever financial challenges you're dealing with today, Honda FCU is ready to help you find solutions. Request a consultation with one of our financial wellness representatives today.