Let's be honest. During a crisis, it's all too easy to lose sight of our goals. We slip into survival mode and completely neglect taking care of ourselves and our finances. That's why we want to take a little time today and give you some tips to help you keep your finances on track during this COVID-19 crisis.
Don't surrender control to your fears.
Fear is everywhere right now. It's dominating the dialogues on the nightly news. It's all over our social media newsfeeds. And it finds its way into our hearts too. You guys, it's ok to be afraid. It's ok to feel unsure about things right now. But, whatever you do, don't surrender control to your fears. Turn off the news. Quit watching the stock market. Don't engage in panic buying. Instead of giving control to your fears, I want you to focus on controlling the controllable - take responsibility for the factors you CAN control - and leave the rest to God.
Get on a budget.
Yes, you heard me right. For the millionth time, I'm starting my blog post with yet another conversation about how badly you need a budget. It's too easy to never start budgeting (to continue living in a perpetual state of financial stress) and it's easy to neglect your plan when things get crazy. But, budgeting is the BEST thing you can do for your finances. If you're not budgeting, then you're wasting your hard-earned income. On average, our first-time budgeting clients find $1,000 that was previously "disappearing" every month - that $1,000 was being mindlessly spent simply because they didn't have a plan for their finances. If you've never put together a budget (or haven't been successful in sticking to your budget), I want you to head over to our website and download our free budgeting worksheet to get you started! Then, watch this video and check out the resources page of our website to learn the basics of getting a solid budget in place.
Have an emergency budget meeting.
This is a time when our routine - and therefore our expenses - are drastically changing. For example, if you have kids who are no longer in school due to COVID-19, you likely aren't paying for extracurricular activities and school lunches, but you might be paying extra for childcare expenses. For another example, the price of gas has dropped significantly and with so many people isolated at home, it's likely your gas expenses are much lower. But, due to increasing demand, you might find yourself paying more for certain grocery and household items. However, these changes aren't just impacting our expenses. For many people, these changes are impacting their income as well, whether that's because they've lost their job or their hours have been reduced. This is a time to have an emergency budget meeting. Sit down (with your spouse, if married), re-evaluate your expenses/income, and make changes to your budget accordingly. Don't ignore these shifting expenses and/or income. Instead, pause, adjust your budget and keep your financial plan on track.
Save, save, save!
Unless you have a fully-funded emergency fund of 3-6 months worth of living expenses and/or you have job stability, during this COVID-19 crisis, you will want to be pouring everything "extra" in your budget into savings! Why should you be saving? Well, if you lose your job, your hours are reduced, or you or one of your family members ends up contracting COVID-19, you are going to need savings to carry you through - savings to pay the bills and keep your family from going into debt in order to survive.
Take care of your family first.
If you are finding yourself in a situation where finances are tight and you're worried about making ends meet, remember that you need to take care of your family first. That means making sure you cover your four walls first - (1) food, (2) utilities, (3) shelter, and (4) transportation, respectively. The debt collectors may call and bully you into believing that your credit card bill is a priority, but trust me, they can wait! You and your family have to eat. So, take care of your four walls!
Know when it's ok to pause.
There are times, especially during a financial crisis, when we need to pause certain positive financial behaviors in order for our family to get through this time. If you are struggling to meet the needs of your family, I would encourage you to pause retirement savings and college savings. I know it's hard to put a pause on savings, but I want you to focus on two things right now. One, the most important thing during a crisis is that you take care of your family. Provide for their needs and make sure you don't go into debt. Two, this pause will be momentary. It won't be long before this crisis will be behind us and you'll be pouring cash into those retirement and college savings accounts yet again!
Don't get guilted into giving.
During a crisis like this, we can feel a lot of pressure to give - pressure to give to support families that don't have basic necessities or pressure to give to support small businesses so they don't go under. Now, I'm not about to tell you that giving is bad or that these people and small businesses don't need your support. Quite the oppositive - giving is good and I hope it's one of the things motivating you to take control of your finances. But, I don't want you to ever feel guilted into giving. While giving is good, it shouldn't be done in haste and it shouldn't be done in response to guilt. All giving should be part of your financial plan. And, remember, you need to take care of your family first. Finally, if you are not in a position to give financially right now but you have a desire to help, then consider other ways that you can give. Write a note of encouragement to someone who's struggling. Make a bunch of muffins and drop them on someone's doorstep. There are so many ways to give, so get creative!
This COVID-19 crisis has been anything but easy. It's a scary, confusing, uncertain, and exhausting time that we are navigating. But, keep in mind that this too shall pass. It won't be long before we will be looking back on this crisis. However, in the meantime, while we are smack dab in the middle of chaos, I encourage you to take time to pause, turn off the news and put away your phone, replace your fears with hope, and control the controllable.