It can be difficult to juggle everything during uncertain times. Read Fifth Third Bank's guide on how to keep control of your finances during a crisis.
Amid the flood of fast-changing news about the COVID-19 pandemic, it can be difficult to stay on top of everything that’s being thrown at us. We’re in the middle of not only a health crisis, but financial uncertainty as well.
While the medical community continues to fight for us on the frontlines, here are a few tips from financial experts to help you keep control of your finances.
Don’t Be Afraid to Ask for Help
Many companies are reaching out to help those in financial need by waiving fees for a certain period of time. Don’t be afraid to ask the same of your creditors, too. If you’ve recently been laid off or furloughed and are having trouble paying your bills, consider contacting your utility, credit card and/or mortgage companies to see if you can negotiate waiving fees or extending your payment period.
Remember, too, that most Americans will be receiving a stimulus check from the government in the coming weeks. The exact amount that you’ll receive depends on your income and filing status: Individuals with adjusted gross incomes up to $75,000 a year are eligible for a $1,200 check, with an additional $500 per child.
Be thoughtful about how you spend that money. If you need it to cover your monthly bills, by all means use it that way. On the other hand, if you have adequate funds for day-to-day, consider padding an emergency fund, investing or donating your stimulus check.
Stay the Course With Your Retirement Account
The market is tumultuous right now, to be sure. If you’ve checked your portfolio lately, you may be worried by what you see. Although worry is perfectly understandable, panic can cause us to make some rash decisions—and that’s never a good idea for your long-term financial goals.
Most experts agree on a few fundamental pieces of advice when it comes to a bear market:
- Don’t pull your money out. It might be tempting to withdraw funds from your retirement account(s) right now, but doing so means you’ll lose out on gaining it back once the market starts to swing up again. And the market will recover, eventually.
- Keep putting money in. Now is a good time to continue contributing as you were before the market took a downswing. If you can afford to put more money into your accounts while prices are low, that’s something to consider as well. But don’t do so at the expense of fully funding your emergency savings, which is even more important in this economic climate.
- Check in to ensure your portfolio is diversified. A solid retirement plan should include a broad range of investments that were made specifically with your timeline for use in mind. For one, this helps you maintain a level of investing that you are comfortable with, given your current needs. In addition, by spreading your money across different investments, you’ll also reduce your risk of suffering significantly when something happens in one particular area of the market.
Understand the New Tax Changes
Taxes can be stressful under normal circumstances, and even more so in the wake of a worldwide pandemic. So the government has stepped in to help out taxpayers in a few key ways:
- The federal tax filing deadline has been extended to July 15, 2020.
- The federal tax payments deadline, first quarter estimated tax deadline for 2020, and deadline for making contributions to an IRA for 2019 were all extended to July 15, 2020, as well.
- Most states are extending their deadlines as well—learn more about what your state is doing here.
Be Aware of Your Spending Triggers
Right now there could be a lot of reasons for us to spend. We’re stressed. We’re home. We’re bored. We’re anxious. We have easy and unlimited access to the Internet. Any one of these things might cause you to spend on items you wouldn’t normally otherwise buy.
To prevent mindless spending on another drawer organizer or a new bookshelf, consider doing something else to occupy your mind. That could be video-chatting with a friend or writing a note to your parents.
If you do feel the need to splurge, try to make it something worthwhile. For example, buying a book from a local bookstore could be a nice way to contribute to a small business. You might also purchase a gift card from your favorite local restaurant that you can use when they re-open. Items that provide some much-needed self-care—like a subscription for a meditation app—might be worth it during this time, as well.
Talk to a Professional
If you’re struggling to figure out the right moves for your money, now is the perfect time to speak with a financial advisor. A financial expert can help you create a new budget based on any changes in income, can discuss how much you should be putting away for savings, investments and debt repayment, and can even help you figure out how to start saving up for future plans—no matter how far away that might feel. They’ll be able to discuss what financial products best fit your needs based on the timeline for your goals, and they’ll help you feel more secure about what you’re doing with your money today to help achieve those goals.
With so much new information coming every day, it might seem easiest to take a back seat. Instead, by making a few proactive moves with your finances, you’ll be taking as much control of your money as you can. And in a world where much is outside of our control, that can help put you back in the driver’s seat toward your goals.