It’s natural to feel fearful or overwhelmed by the big, sweeping changes happening around us, says Shannah Compton Game, a certified financial planner and host of the Millennial Money Podcast. “But taking action — even a small step — can help move you out of that place of fear.”
Not sure where to start? Try one of these concrete steps you can take (today!) to regain even a small sense of control over your finances — and be that much stronger to face the future.
1. Take Inventory
If you make it to the end of most months with very little left over in your checking account, you might assume you need your full paycheck to survive. But, for many people not living on a tight budget, there’s fat to trim out of your day-to-day spending, says Compton Game. And it’s helpful to know what your baseline budget is: the amount that you need to cover expenses that you absolutely have to pay. “That’s things like rent or mortgage, car payments, and basic groceries,” she says.
Figuring out that number is as simple as reviewing the last two to three months of bank statements, and tallying any figures that are essential. Seeing that you could live on, say, 60 percent of your paycheck, can also be a big stress reliever if you’re facing uncertain times ahead.
2. Press Pause Where You Can
While you’ve got those bank statements handy, go ahead and highlight any services or expenses that you can live without or are unlikely to use in the near future. Depending on your finances, you might want to put your accounts on hold or go ahead and cancel them outright. Maybe TV streaming is absolutely essential during the pandemic, but you want to press pause on your gym membership, magazine subscription or restaurant budget. Recurring expenses are especially great to cut, Compton Game says, because those savings stick around month after month.
3. Get Help
The pandemic triggered a small wave of relief programs aimed at those in need, including those $1,200 checks that went out in the spring. Other relief measures included expanded unemployment benefits to cover self-employed and gig workers, low-interest loans and lines of credit available from banks, and credit card companies temporarily halting payment dates. Many relief programs have already expired but more may appear, so keep checking.
The fastest way to get info is to head online. For unemployment benefits, visit your state’s local site for up-to-date info. The American Bankers Association is maintaining a list of banks’ responses to the current crisis. Check first with the banks you already belong to, as they may be more willing to offer payment assistance or fast-track a loan for their existing customers. But relief doesn’t come automatically — you typically have to ask, points out Compton Game. Many counties, cities and states are also offering financial help programs. (The National Governors Association has a list of resources by state.)
4. Get Your Paperwork in Order
Especially if you’re stuck at home, now is a great time to get your finances organized, says Compton Game. “Create a list of those money tasks that you've always wanted to do but haven’t had time for,” she says. Maybe you take the time to track down your most recent tax return or start a folder to organize your bank statements. That way all of your financial information will be easily accessible if you need it to apply to a relief program or loan.
It's also a great idea to get a head start on estate planning, if you haven’t already, says Compton Game. Though this may sound about as appealing as a voluntary root canal, getting your future under control can help you feel better today. There are many, many online sites, such as NOLO or Tomorrow, that have tools to help you create a simple will and financial power of attorney without leaving your couch and for less than a week’s worth of fancy lattes. (And if you do get sick, having your financial house in order will be one less thing to worry about.)
5. Jump-Start Your Savings
To get the most out of this money, look for a high-yield savings account, Compton Game says. She suggests checking out the fee-free savings options at Ally Bank, Capital One 360, Marcus by Goldman Sachs, and Synchrony Bank, which all offer higher-than-average returns. If it’s with a different bank than your other financial accounts, even better: You’ll be less tempted to dip into it for non-emergencies.
If you want to stoke your savings even faster, set up (or ramp up) automatic deposits through your work, which means a portion of each paycheck will head straight to your emergency savings. Even $50 per paycheck can add up, so you’ll have a bigger savings cushion if you need one down the road, says Tara Unverzagt, a certified financial planner and founder of South Bay Financial Partners in Torrance, California.
6. Get Pro Advice — for Free!
A financial planner can offer objective, trained advice on what your next steps should be, and how to navigate the current crisis while still protecting your financial future. If you’re looking for information, investigating your employee assistance program is a great place to start — they often offer free counseling services, as well as other resources for dealing with hardship or emergencies.
If you don’t have the spare cash to pay for a consult, you may still be able to get help. Many members of the XY Planning Network are offering free financial planning services to those impacted by COVID-19. Ditto the Financial Planning Association and the National Association of Personal Financial Advisors, both of which maintain lists of volunteer certified financial planners.
7. Study Up
We’re not one to knock a horror-movie marathon, if that’s what gets you through a lengthy stretch of sheltering in place. But if you’ve ever wanted to better understand how the financial markets work or wrap your head around retirement planning or dive deep into the psychology of spending, well, now might be a great opportunity to fill your free time with financial literacy.
The Consumer Financial Protection Bureau has information and guides for major money decisions, and has updated them in response to the pandemic. The National Credit Union Association can point you to a bevy of online learning options. Online book sellers offer robust reviews on top-selling titles. Or, if you don’t have the attention span for a personal finance book at the moment, consider a podcast, such as Planet Money, So Money, or HerMoney. Post-pandemic, we’re betting dividends and opportunity costs make for some fascinating brunch topics.
No one step will put you back on steady footing. But every proactive step you take is a move in the right direction.
Updated July 27, 2020.
Note to our readers: This information is being made available as a free resource to the public. It is not an endorsement of any of the Finance-Related Resources listed in this article — financial consultants, planners, services, organizations/associations, websites, tools, lenders, credit unions, or banks. None of the Finance-Related Resources listed have solicited Rally Health to be included, and Rally Health receives no compensation from the Finance-Related Resources mentioned in this article.
KATE ROCKWOOD
Rally Health
