The coronavirus pandemic continues and certainly will do so through at least the end of the year. While this is an unprecedented period for almost all of us, there are some well-known things we can do to successfully navigate our way through it. I’ve summarized a few of them below.
Watch Cash Flow. This is not the time to dig yourself into a financial hole. Cash flow has two parts: income and expenses. Naturally, the goal is to have income exceed expenses.
Expenses. If you currently track your expenses, congratulations! If you don’t, why not use the enforced at-home time to start doing so? Once you’ve collected a little expense history, you can pretty easily set up a rough budget. With this information you can better control expenses. For example, with your expense history, you’d probably see some items such as entertainment and travel drastically reduced. On the other hand, you’d probably see an increase in grocery expenses due to delivery charges and/or increased internet spending. Having a handle on things lets you adjust your lifestyle in near real time.
Expense Relief. This deserves its own section because there is so much help available during this pandemic. Banks are cutting consumers some slack on loans, same for credit card payments and student loans (payments can often be suspended through the end of September). Just go to the appropriate website and see what’s available.
Income. Sources of income will vary depending on your particular situation. If you’re still working, your paycheck is normally the biggest component. If you’re retired, social security, pensions, RMDs and investments provide most of your income sources. If you’re unemployed, you might have unemployment insurance (including the $600 added-benefits check from the government) and hopefully you have a rainy-day fund to help get you through this. And, of course, many of us received the $1,200 COVID-19 relief check through the CARES Act.
Scam Alert. The scammers are super active right now trying to take advantage of the crisis. It seems like I get several emails a week asking me to click here to reactivate my Amazon account or to verify my banking information. You know the drill on this, but just increase your caution for now. The FTC has actually provided some specific scam warnings:
- Don’t respond to texts, emails or calls about checks from the government. Here’s what you need to know.
- Ignore offers for vaccinations and home test kits. Scammers are selling products to treat or prevent COVID-19 without proof that they work.
- Be wary of ads for test kits. Most test kits being advertised have not been approved by the FDA, and aren’t necessarily accurate.
- Hang up on robocalls. Scammers are using illegal robocalls to pitch everything from low-priced health insurance to work-at-home schemes.
- Watch for emails claiming to be from the CDC or WHO. Use sites like coronavirus.gov to get the latest information. And don’t click on links from sources you don’t know.
- Do your homework when it comes to donations. Never donate in cash, by gift card, or by wiring money.
Donate. Even though you need to watch out for scammers, this is a wonderful time to support your favorite charities if you’re in a position to do so. More and more people need help during these difficult times.
Buy Locally. This is a tough time for many companies – large and small. If you can find your items locally, why not help keep our businesses afloat? If you aren’t able to go out yet, ask the business if they offer delivery.
Invest in Yourself. Maintaining your finances is certainly important, but don’t forget to also maintain yourself and your family. A top priority in this area should be exercise. You don’t need to go to the health club to stay fit. If you have some home equipment, dust it off and start riding (or whatever). Take a walk (wearing a mask and social distancing where appropriate). Eat healthy food. Being at home may provide the time to prepare your own meals – and they can be very tasty! Attend to significant medical problems – maybe your doctor offers virtual appointments. Limit your consumption of bad news. Check what’s going on, but don’t live on your phone or laptop all day. Maintain social contacts – remotely. It might be dangerous to get together in person, but many of us have more free time to call (or FaceTime) family and friends.
If you’d like to further discuss managing your finances during the pandemic or have other financial questions, we’d be happy to discuss things in a no-charge, no-obligation initial meeting. Please visit our website or give us a call at 970.419.8212 to set up an in-person or virtual meeting.
This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products. Please consult your tax or investment advisor for specific advice.