Four tips for managing your finances after COVID-19
The COVID-19 crisis has affected everyone in a lot of different ways. The illness itself has put millions through misery, and the impact on the global economy has been a source of stress for people across the world. However, there is a light at the end of the tunnel.
The COVID-19 crisis will be over one day, and when it is, it is crucial that you have a financial plan for whatever happens next. Here are some tips that can help.
1. Evaluate your budget
Did COVID-19 impact your income or your savings? Perhaps you were temporarily furloughed or laid off. Perhaps you had to dig into your savings to get by for a few months.
Do not expect your budget to return to normal once the COVID-19 crisis is over. You will need to reevaluate your income and expenses and build a new budget to help you meet your savings goals and support your daily expenses.
2. Rebuild your emergency savings
If you had to exhaust some or all of your savings during the COVID-19 pandemic, it should be a priority to build it up again. Clearly, having emergency savings came in handy during these difficult times, and you never know when you might need to dig into them again.
Never had an emergency account before COVID-19? This crisis should show you the importance of having an emergency account, so it needs to be a priority for you to make one when you are able. A good goal to aim for is to save at least three months’ worth of income in an emergency fund.
3. Plan for student loan payment
In March 2020, the federal government suspended student loan payments, stopped collecting on defaulted loans and set interest rates to 0% for a period of 60 days. This was all done in an effort to help students and graduates get through the difficult economy during the COVID-19 crisis.
However, once the COVID-19 crisis is over and you are responsible for your loan payments again, you need to have a plan for paying them. Estimate what your loan payments will be and factor them into your budget. This suspension ends December 31, 2020, but it could be extended by either President Trump or President-elect Biden once he takes office.
4. Stay focused and watch out for scams
Recovering financially after the COVID-19 crisis can be a long and difficult task, but it is possible if you stay focused, stick to your budget, and live within your means or below them.
Also, keep an eye out for scams. Scammers are reaching out to people, promising financial relief, asking for valuable information or posing as creditors threatening action if you do not pay them. Learn more about scams here and what to do if you suspect you are the victim of a scam.
Talk to a ProVise CFP® professional about financial management in a post-COVID world
It can be hard to imagine right now, but the COVID-19 crisis will be over one day. Are you prepared for what happens next? There is much that is unpredictable, but financial stability should always be a priority in your goals.
At ProVise Management Group, our CERTIFIED FINANCIAL PLANNER™ professionals can get to know you and your current financial circumstances, goals, risk tolerance and personal values to help you develop a plan that works for you. We can also create a written plan for you at a fiduciary standard of care. All our written plans come with an unconditional money-back guarantee. If you are unhappy with your written plan, you can return it to us, and we will refund 100% of the fee paid.
Are you ready to talk to a professional about personal financial management? Contact ProVise today to schedule a complimentary consultation.