While I believe one of most important issues for individuals to be concerned about during this COVID 19 is their health, however the one thing that will impact all of us the most is our finances. If you do not get your finances in hand, it will affect your health because you will be worrying. Worrying will increase your stress level and if your stress level is increased, it will affect your immune system. You do not need to compromise your immune system especially during this pandemic.
Please note that I cannot tell you what to do, but I believe it is my duty to share with you the gift that God has given me so here are some financial tips.
- Know your financial condition.
Now is the time to truly document your financial condition. List all of your assets, liabilities, income and expenses. Develop a budget and a plan based on your condition.
Some people will experience a reduction in income as result of reduced hours of employment or no employment at all. You should know the difference between your needs and wants. Eliminate your wants and focused on your basic needs.
- Deferral of mortgage payment
Some banks are offering deferred payment of principal and interest. Personally if you are in still in a position to make your mortgage payment, please do so because in the long run, your mortgage will be extended. However, if you are not in a position to pay as a result of being laid off, then take advantage of this opportunity.
- Refinance if interest rate is favourable
More than likely the interest rate may be reduced. If this is the case and you are strap for cash and have a mortgage and need some extra cash, consider refinancing your loan. Payments can be lower if interest rate is lower.
Some of you may not have to pay mortgage but you have to pay rent. If you are in a position, please continue to pay your rent as your landlord also has obligations to meet. If you are not in a position, then speak with your landlord about possibly reducing the rent. Hopefully some landlords have a cushion in the rent that they can reduce it and still meet their obligations. In addition, some of you may have to relocate to other places where the rent is cheaper. This may include living with family members or getting roommates to share in the cost.
- Short term rental
Individuals in short term rental will experience most of the loss. You may want to consider returning to long term if you have loans obligations. If you don’t have any loans, then stick it out and hopefully things will improve soon.
- Alternative employment
For individuals who find themselves being unemployed, do not panic. You may have to look for alternative employment such as babysitting, delivering food and groceries services to individuals, cleaning services and repairing services.
- Vacation pay
Of course, we do not know how long this crisis will last, perhaps you can discuss with your employer about allowing you to take vacation now so you can get paid for at least two weeks.
- Avoid more debt
During this time, you may be tempted to get more debt by getting loans and using your credit cards. Please avoid getting new debt unless you are getting a good deal on refinancing. If you are in a position, please continue to pay your loans and credit cards. If you are not, then consider negotiating for a lower payment terms until you are in a better position.
- Tap in savings
If you are still employ, do not touch your savings, in fact still continue to save something monthly. If you are unemployed and have savings, you will need to tap in your savings. However, do not utilize all of it. Leave some because we do not know how long this crisis will last and you do not know how long you will be unemployed.
- Change your eating habits
Now it is not the time to be spending a lot of money on food that you will eventually not eat. Make sure you eat lots of fruits and vegetables. Start your garden now. Eat basic and simple food as long as it healthy.
- Reduced consumption on power
Reduce your consumption on power. One of the recommendations provided by health practitioners is increased ventilation. Discontinue using the AC especially during the day. Keep the windows open, however, at nights for safety reasons, close the windows. With the increase in the electricity rate in April, do your best to conserve energy.
- Share with others
If you are wealthy, please use this time to help others either by providing loans to other individuals’ debts free or by giving others something during this crisis.
Despite how things look, do not panic. Review your budget and do your best to manage your finances. Ask for help. Don’t be quiet on this because if you do, you may harbor many negative thoughts.
Remember that this crisis is not permanent. Having faith, implementing a great action plan and having a great attitude will help you to survive and thrive.