5 Tips For Staying Financially Afloat During The Coronavirus Outbreak

Money can be a stressful topic, especially during times of crisis. With the coronavirus continuing to take hold, more and more people are losing their jobs and facing financial uncertainty. Whether you’ve lost your job, have taken a pay cut because of scaled back hours, or have lost significant capital in the declining market, there are steps you can take to put yourself in the best financial position possible, and hopefully in doing so, feel a bit better. We asked Shannon McLay, founder and CEO of The Financial Gym, for her top financial tips and advice for all of us during this time. 

1. Cut your expenses. 

If there was ever a time to tighten our belts, it’s now. Yes, it’s tempting to stock up on items—because many of us are essentially in quarantine or shelter-in-place—finding ways to cut costs and avoid unnecessary spending is going to be key throughout the coronavirus outbreak. As McLay puts it: “If you have lost your job or you’re afraid of losing your job, then you need to move to your extreme budget plan.” If you don’t have an extreme budget plan, set aside time to make one by analyzing your spending last month and seeing what needs to stay and what can go. 

2. Preserve as much cash as possible. 

In the same way that we should all have an emergency fund, it’s important to keep cash on your person during emergencies such as this, because you never know what could happen. Also, try your best to avoid racking up credit card debt and look for ways to lower your debt payments now that interest rates have been lowered, McLay recommends. 

3. Focus on your mental health so that you don’t overspend while quarantined. 

The act of shopping and buying causes our brain to release dopamine, otherwise known as the “feel good” neurotransmitter. It’s no wonder that making purchases feels pleasurable and we call it retail therapy. Crises such as the coronavirus outbreak can take a toll on our mental health, and that can make us more susceptible to poor decision-making and frivolous spending. Sure, you have to buy what you need—food, antibacterial products, paper goods, medications, and more—but overspending on anything (or hoarding lots of items) is not going to make us feel better when money is the source of our anxiety in the first place. 

Before you click add to cart, make sure you’re in the right state of mind and taking care of your mental health. If you’re not feeling level-headed (you’re angry, sad, depressed), forgo making the purchase until you feel more clear-minded. Some effective practices that can improve your mental health include meditating, exercising, journaling, taking a walk, talking to a supportive friend, reading a book, singing a song, running a bath, snuggling your pet, and taking time to relax and unwind. 

4. If you can invest more, it may make sense over the new few months. 

People are very anxious about the stock market right now, and understandably so. Many folks are losing large sums of money—and if that’s you, you might be asking yourself: Should I take my money out of the market, or stay in it for the long haul? McLay recommends the latter, and cites precedent as her reasoning. 

“The markets are scary now, but as long as your rent money or money you need in the next year is not invested (which is money that shouldn’t have been invested otherwise), then you don’t need to panic,” she says. “In 2009, the S&P dropped in half from the previous year and it took about four years to recover. Even if you’re going to retire in the next few years, you won’t use all of your nest egg in one year—you’ll likely need for it to last you more than 20 years, so you can be patient in that situation as well. If you have the opportunity, it may make sense to increase your retirement contributions now to take advantage of the lower market prices.”

5. Take advantage of every government program that you can. 

Small businesses that have had to close and individuals who have lost employment may qualify for certain government assistance and relief programs. A number of media outlets have been publishing articles explaining these programs and showing where to go to receive help, like Forbes, The Ascent, and The New York Times. As time goes on, more information will become available, so stay vigilant and if you qualify for assistance, apply for it.

Above all, do your best to stay calm. 

This is an incredibly difficult period of time for a myriad of reasons, from health-related to financial. Staying educated on the status of the situation and taking care of ourselves are the best moves we can make right now. 

Stay safe, everyone. 

xo

Renata