3 Pandemic Precautions That You Should Take Now to Remain Financially Healthy
Ominous economic news has plagued every major network for months, from record high unemployment, to an extremely volatile stock market. The pandemic has put a lot into perspective, and if you have not begun already, now is the time to start making the best decisions for your financial security.
Planning your financial future can be an extremely daunting task, but here are a few simple tips that will get you started on the right path:
1. Know Where Your Money is Going
This may seem fairly obvious, but many people have no system for managing their spending, or for understanding their investments. The moral of the story is to make sure your money is not going to waste. The best way to do this is to create a budgeting system to maximize the efficiency of your daily spending. Make a list of the things that bring you the most utility. Use this list to review your budget, and eliminate any unnecessary recurring expenses.
For example, expenses such as take-out food, insurance on unused vehicles, and clothing definitely should not be incurred before your mortgage payments and other essential living payments are secured. If you can do without something, that money would be put to better use in an investment or savings account.
2. Minimize Your Interest Rates
Today’s interest rates are incredibly low by historical standards. People with student loans and mortgages are in a prime position to take advantage of this. If you have a good credit score, you can refinance your mortgage at today’s lower rates, and save thousands of dollars in the long run. Even a .5% interest rate reduction can have huge benefits.
The same thing can be achieved by credit card users. If you are unable to pay off your full principal amount, many companies are very willing to give you a lower interest rate. All you need to do is ask them. To increase your chances of a large rate reduction, mention that you’re thinking of switching to another card company, or leverage your improving credit card score.
3. Take Advantage of Lockdowns
If you’re like most Americans, the chances are that you are not going out nearly as much as you were a year ago. This means less eating out, less trips to the mall, less activities, and more stimulus. For many, this means that they have a lot more disposable cash in their pockets. Put this extra money to good use. Education, investment and retirement accounts, and debt management are all great places to start.
Conversely, if you believe you are secure in those areas; use your extra money to give back to the hard hit parts of your community. Donate some to small business relief funds, or spend it at restaurants and small businesses, or anywhere that was negatively affected by the pandemic regulation.