Q: What steps should I be taking to protect my personal finances during this time?
A: The coronavirus outbreak has already generated consequences for the national and global economy — and experts say we’re only seeing the beginning of the pandemic’s financial fallout. The virus ended one of the longest bull markets in history, as the stock market plunged by a full 25 percent in one volatile month. More than that, businesses have been adversely affected by the outbreak in many ways: production lines have been put on hold, the global-wide halt on travel has caused tremendous losses for the tourism and airline industries, sports and entertainment have taken huge hits, countless other businesses have been negatively impacted, there has been decreased spending and also a shortage of personnel due to quarantines or school closures.
With all this uncertainty, it’s easy to fall into a panic and wonder if there are some concrete steps you should be taking to save your personal finances right now. Here are some practical do’s and don’ts to help you maintain financial stability and peace of mind during this time.
Don’t: Panic by selling your investments
Both seasoned investors and those simply worried about their retirement accounts can find it nerve-wracking to see their investments drop in value. It may seem like a smart idea to sell just to spare investments from further loss, but financial experts say otherwise. According to The Motley Fool, most sectors of the economy will recover as soon as the outbreak clears. For example, consumers may not be shopping for clothing or booking vacations right now, but they will likely do so when it is safe to shop and travel again.
Do: Trim your spending
The thriving economy the country has enjoyed for a long time has prompted a gradual lifestyle inflation for many people. As the economy heads toward a probable recession, this may be a good time to get that inflation in check. Work bonuses, raises, and promotions will most likely not be handed out during a recession. Some may even find themselves without a job if companies are forced to lay off employees in an effort to stay solvent. Trimming discretionary spending now is a good practice for making it through the month on a smaller income. It’s also a good idea to sock away some of that money for a rainy day.
Don’t: Put your money before your health
Financial wellness is important, but physical health should always take priority. If you’re feeling unwell, and especially if you’re exhibiting any symptoms of the coronavirus — such as fever, coughing and shortness of breath — stay at home. Do the same if you’ve been exposed to someone who has tested positive for COVID-19 in the past 14 days. Don’t let financial considerations come before your health and the health of those you come into contact with each day.
Do: Consider a refinance
The silver lining of an economic environment such as this are historically low interest rates. Refinancing an existing mortgage at a lower rate can potentially save homeowners several hundred dollars a month. That extra breathing room in a budget can be a huge difference maker during a recession. Be sure to work out the numbers carefully before considering this move and decide if it makes financial sense for you, since a refinance isn’t cost-free. If you would like to speak to a representative in our Lending Department to weigh your options, contact us today!*
The coronavirus has already impacted the economy, and may likely continue to do so for awhile. Keep your finances safe by remaining calm, putting your health first, and taking some of the practical steps mentioned above. If you have questions about your finances – just ask! We are here for you.
*APR = Annual Percentage Rate. Subject to credit approval. Credit worthiness determines your APR. Rates quoted assume excellent borrower credit history and are for qualified borrowers. Your actual APR may vary based on your state of residence, approved loan amount, applicable discounts and your credit history. Higher rates may apply depending on terms of loan and credit worthiness. Available on primary residence only. The Interest Rates, Annual Percentage Rate (APR), and fees are based on current market rates, are for informational purposes only, are subject to change without notice and may be adjusted based on several factors including, but not limited to, property location, loan amount, loan type, occupancy, property type, loan to value, debt to income ratios, FICO credit scores, refinance with cash out and other variables. Mortgage insurance may be required depending on loan guidelines. This is not a credit decision or a commitment to lend. If mortgage insurance is required, the mortgage insurance premium could increase the APR and the monthly mortgage payment. See Credit Union for details. A First Financial membership is required to obtain a mortgage and is open to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties. Nationwide Mortgage Licensing System & Registry ID #685814
Article Source: CUContent.com