Wise Financial Decisions During the Coronavirus Pandemic
With the current state of the market and society as a whole, it is easy to be confused about what moves to make next. Fortunately, there are a few simple financial tips to follow to ensure that you and your family are protected and financially stable. Following these tips may help lift the burden of worry in these turbulent times.
Don’t Make Any Financial Decisions Out of Panic
During any situation in life, and especially during market volatility, is it paramount not to make any rash decisions with your finances. The market is cyclical and will restore itself in time. Unless you are retiring in the near future, you should not concern yourself with your portfolio’s performance right now. You only stand to lose money immediately if you make the common mistake of liquidating stocks without giving them the chance to come back up and recoup losses. If you are in a situation in which you truly believe you need to remove money for any reason, be sure to discuss it with your financial advisor first. Your advisor has the education and experience required to make a sound decision on the matter. If you do not have a financial advisor or would like to speak to an additional advisor, it is important to do so in a timely manner.
Keeping calm is important in other aspects of your finances, even outside of what you have in the market. You don’t want to waste your cash, so do not make needless panic-purchases. A common mistake to avoid is overstocking your home with more than you actually need. Although it is not unwise to keep an extra stock of a few essentials for peace of mind, doubling or tripling your entire inventory of food and toiletries is unnecessary, costly and risky. Already people who overstocked on food initially are throwing away uneaten spoiled food. Those are dollars being thrown away!
Use that Cash Efficiently
If you’re not overspending on preparations, you may have some cash on hand and be wondering how to use it wisely. Especially with the stimulus check dispersals coming in the near future, it is important to know where your cash should be going. First and foremost, if you do not have an emergency fund, now is the time to build one if you can afford to do so. With extra time at home can come additional utility malfunctions and unforeseen expenses.
If you already have a well-funded emergency account, now may be a good opportunity to invest some cash. Advisors can help make a down market a great investment opportunity for you, as it gives you the ability to buy at a lower price than normal. If you are fortunate enough to have the money to invest at this time, you owe it to yourself to evaluate this option.
Take Advantage of Low Interest Rates
The Federal Reserve has drastically cut interest rates to encourage market growth. Even if not investing in the market, you can make some financial moves to gain from this interest rate cut. If you have been looking to take out a loan in order to purchase something like a car or even a house, you are likely to get a better rate now than you would have at the beginning of the year. You can also use this opportunity to refinance existing loans, as you’ll likely find that you are eligible for a much better interest rate. Do you have a lot of high interest debt from credit cards or old predatory loans? You may want to look into consolidating this debt under a single loan to take advantage of current interest rates. Using these methods, this down market may actually help you come out on top of where you would’ve been otherwise!
It is important not to allow these volatile times to get the best of you. Following these simple tips may help you get through this financially sound, and you may actually prosper under the right circumstances. It’s always important to keep a sound mind and trust your financial advisor. If you currently do not use a financial advisor, talk with one today. Let these tips give you a calm mind in these trying times.