Managing your money during and after coronavirus

The past few months have been hard on everyone. We’ve experienced the start of a global health crisis. Going back to school this fall is going to be far from normal. Your friends are constantly arguing about politics on Facebook. And now every time your allergies flare up, anxiety sets in while you Google things like, “is it allergies or COVID?” The last one was meant to make you laugh because we’re all dealing with a lot right now.

Another major cause of stress for you right now might be your finances. You may be one of the millions of people who have lost their job or had their hours cut. And even if you’re still employed full time, there’s a lot of uncertainty about what the future of work and the economy will be like.

No matter where you are on that spectrum, I want to explain what you can do to take care of your financial health and manage your money.

Analyze where you're at

Occasionally checking in and analyzing your finances is important to do, especially now. So much about our normal lives has changed, and it's affected how we spend and save our money.

Spend some time going through all of your accounts and see what you've been able to save, what debts have piled up, and how your spending has changed. One of my readers shared this the other day, and I think it accurately sums up what's changed with most people's money:

New MONTHLY Budget
Gas $0
Entertainment $0
Clothes $0
GROCERIES $1624

Analyzing your spending is a smart move right now because it will show you if you can allocate more toward savings, or if you need to reign in spending on categories like groceries or entertainment.

You should be adjusting your budget any time you go through a major life change, and it's safe to say this is a major one. That being said, once we're on the other side of this, you'll want to go back and analyze things again.

If you're using technology to track your spending and manage your accounts, this step is much easier. Most apps categorize spending for you and can aggregate all of your accounts in one place. My wife and I use Mint and Personal Capital, but there are lots of budgeting apps availableopens in new window.

Keep your debt under control

My biggest recommendation here is to avoid any new debt. It's tempting to take advantage of low interest rates to buy a new car, take out a loan to remodel your house, or finance anything. You feel like you're getting a deal, even if you weren't in the market for these things in the first place.

But the truth is that debt is a liability, even if it's 0% interest debt. You still have to pay it back.

However, there are other ways to take advantage of low interest rates that can help you get a better handle on your debt in the long run.

• Refinance your house. Refinancing your mortgage at a lower rate can save you interest charges over time, and if you go with a shorter loan term, like 15 years, you can reduce your interest rate even more. But pay attention to fees, and try not to extend your loan term if you don't have to – this is when refinancing can cost you more.

• Call your credit card companies. If you have a good credit history, you can call your credit card companies and see if they can lower your rates. A balance transfer card is another possibility, where you roll your balance over to a card with a super low or 0% interest rate promotional period. To save money with a balance transfer card, check the fees and have a plan to pay the balance off before the promotional period is over.

• Don't forget about your student loans. The federal student loan payment and interest waiver is set to end on September 30, 2020. Make sure you have a plan to make your payments when they come due, and if you don't think you can make them, contact your servicer about income-based repayment plans, deferment, or forbearance. For high-interest rate loans or private loans, you may be able to refinance your student loans at a lower rate.

Keep eating at home

Eating at home has become more of a necessity, and there's some benefit to that—you're probably saving a lot on going out to eat. Most of the people I talk to aren't just saving on biweekly dinners out. They're also saving on work lunches and drive-through coffee.

What many people have learned is how much money you can save by eating at home. Remember that lesson after this is all over. Sure, your grocery spending will increase, but overall, eating at home saves you money.

See if you can lower these common monthly expenses

Depending on where you're at, you might need to start cutting some of your bills immediately. Other people might want to start reducing their bills now and defer that savings to their emergency fund so they're better covered if something does happen to their job.

No matter the need, the following are some really easy ways to lower your monthly expenses.

• Streaming services: It's easy to justify spending more on at-home entertainment, but consider paying for only one streaming service at a time, or at least cancel any services you're not using as much.

• Cell phone service: There is a growing list of budget cell phone providers that drop your rates to around $35/month or less. These are companies like Republic Wireless, Ting, Mint Mobile, and T-Mobile Connect.

• Internet/phone provider: Call to see if there are any promotions, discounts, or deals you can take advantage of. Someone on my team recently did this, and they're not only saving $20 a month, but they upped their internet speed, got a free booster box, and even got a full year of HBO Max for free. It's a promotional deal, so they made a note on their phone's calendar to reassess after the promo period is over.

• Car insurance: You can also call your car insurance company to ask about discounts or increase your deductible to lower your premiums. The last time I did this I was able to save $40/month.

Even though you might be lowering your bills out of necessity now, it can have some positive long-term effects. When you're back at work and your finances get back to normal, you will be able to put those savings toward debt, retirement savings, etc.

Keep investing

If you can keep investing and contributing to your 401(k), do it. Stop paying attention to what's happening in the stock market and keep looking at the big picture. If you're a young investor, you have decades before retirement, and if you're close to retirement, you still have years ahead of you.

When the stock market is down, investing during those periods means your money can go farther. You'll need to keep your focus on your long-term strategy; the market will recover, and you'll see your portfolio bounce back.

Plan for the near future

One of the hardest things about what's going on is that it's hard to predict what will happen in the next few months. But you can still be proactive, think about the possibilities, and then develop a plan.

Think about things like:

• Will you need to figure out childcare services if schooling is all remote? If so, how will you adjust your budget to accommodate this extra expense?

• Do you know whom to talk to at your company about the Families First Coronavirus Response Act (FFCRA) Paid Leaveopens in new window ? Depending on the situation and the length of your leave, it's two-thirds pay for up to 12 weeks.

• If you need to start working from home again, is there something that would make it easier for you?

These are just a few situations to think about, and you don't need all of the answers right now. But set some time aside to think about them and work on putting plans in place.

Start a side hustle

Starting a side hustleopens in new window is a great way to increase your monthly income, and there are lots of viable options right now. Side hustles can reduce some overall financial stress—many are flexible, and some allow you to work online.

Running Facebook ads for local businesses is one of my top picks, but there is also a high need for in-person or virtual tutors and food delivery drivers. Offering freelance services—writing, editing, consulting, graphic design, web development, etc.—is another legitimate option.

Finding a side hustle can safeguard your finances if something does happen to your job, but it's also a proactive measure that will diversify your income, help you pay down debt, and put more money in the bank.

Take care of your health—mental and physical

Money is emotional for a lot of people, and stress can trigger spending binges. Go easy on yourself if you overspend—you're doing the best you can in a very uncertain time.

One thing I'm trying to work on is to stop doomscrolling. Sometimes I check my phone and fall down this internet wormhole of bad news and statistics, and it leaves me feeling anxious and angry. I've been able to curb it by turning on a podcast anytime I get the urge, and I've been feeling some relief almost immediately.

Your physical health is obviously at risk here too. We all know that it costs money to get sick, so focus on staying healthy by wearing a mask, staying home, getting enough rest, and drinking plenty of water. I would give you more advice if I were in health care, but I'm not, so listen to what doctors and scientists are advising us to do.

The uncertainty caused by this pandemic has been hard on all of us. But I do think it’s important to spend some time thinking about what positive change has occurred in your life because of COVID.

Are you getting to spend more time with your kids or your spouse? Did you finally learn how to bake sourdough bread? Have you tackled that pile of books you’ve been wanting to read? Did you realize that you want to make a career change?

Be grateful for these positive changes even if your finances take a hit. Money is important, but it’s not everything.