6 Financial Tips For Post -COVID-19

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To prevent this short-term crisis from turning into long-term financial hardship, Americans must carefully adjust their financial plans to the new reality. Here are six tips for helping your household or small business weather this storm and come out stronger on the other side.

Avoid Panic Selling

The longest bull market in history ended with the fastest descent into a bear market ever. The rapidity of the decline sent millions of investors into panic, but for many, exiting the market was exactly the wrong move.

Maintain A Cash Reserve

When equities sell at a discount, cash is king. It’s wise to keep a reservoir of cash that can be deployed into the markets after equities fall, fulfilling the rule to buy low and sell high.

Separate Wants From Needs

With millions of Americans suddenly becoming unemployed, households should reevaluate spending. The key is to eliminate non-essential spending.

Take Advantage Of A Line Of Credit

A line of credit provides a fall back should your emergency cash deplete. Due to the economic devastation wrought by the pandemic, banks and other lenders are taking steps to make lines of credit more widely available. 

Reduce 401k Deferral

Investment advisors usually disapprove of this method, but in an extreme emergency, it may become necessary. If possible, reduce contributions to the employer-match level rather than taking out a loan or emergency withdrawal.

Utilize 0% Credit Cards

With paychecks interrupted and stimulus payments still in process, some Americans have been forced to carry credit card balances. If possible, obtain a 0% initial APR card that offers cash back or other rewards. By minimizing the amount charged, you have a better chance of paying off the balance completely while still in the 0% period.

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