Has your financial situation changed since the start of the Coronavirus pandemic? Let us help you manage your money and get back on track to reach your financial goals. This current moment is challenging for everyone, but Central Bank has more than 60 years’ experience helping our customers through economic ups and downs and other crises. Check out our money management tips below and reach out if you need more personalized advice!
Manage Your Savings
When it comes to emergency funds, it’s best to keep money for short-term needs in a cash account such as an individual savings account or certificate of deposit. Money market checking accounts are another good option if you can meet minimum balance requirements to avoid a monthly fee.
Basically, any savings you may need to use in the next five years should be in an interest-earning, FDIC-insured account. That way you can benefit from compounding interest without risking a sudden loss right when you need your money. For example, stock market values fell sharply at the beginning of the Coronavirus crisis, just as many people were also getting laid off or furloughed. When you’re investing for the long-term, such as retirement, periodic falls don’t matter much because the market still has time to rise before you need to take money out of it. That’s why we distinguish between short-term and long-term savings goals.
Organize Your Bills
Whether or not you’re dealing with a job loss, this is a good time to get organized and take stock of your monthly bills.
•Set Up Auto-Pay or Give Yourself a Calendar Reminder to Pay on Time. Just making on-time payments can help you avoid expensive late fees.
•If You Need Help, Ask. Financial institutions both large and small are aware of the economic crisis many people are facing and want to help where they can.
•Look for Bills to Get Rid of Altogether. It’s easy to sign up for online memberships, subscription boxes, and other recurring services. Those individual small charges can add up quickly. Take the time now to look for anything you can cancel or at least suspend until you get back on your feet financially.
Take Control of Your Debt
If you just lost your job, you probably can’t afford to make extra debt payments. In that circumstance, you should talk to your creditors about options for lowering your payments and/or skipping one month.
However, if you’re still working through an economic crisis, this could be a good opportunity to get more deliberate about paying off credit cards, student loans, and other types of non-mortgage debt. For example, during the Coronavirus crisis, many people saved money by not driving as much and not going out to eat or drink. You could take that savings and throw it at your debt--even a little bit helps.
Review Your Budget
As mentioned in previous sections, take the time to look for things you can cut and decide how to reallocate that savings. If you struggle to make and keep budgets, try out a new-to-you budgeting software or app.
Continue Contributions to your Retirement Account
When people see the stock market going up and down, at the same time that general economic anxiety is on the rise, it’s natural to react by stopping your contributions or wanting to take your money out of the stock market. But that is the opposite of what you should do. Remember, investing is a long game, so stay the course and, as long as you still have your job, continue your regular contributions. There are tax advantages, for one thing, and if you “buy low” now your money can grow that much higher over the long-term. Plus, you don’t want to lose out on the “free money” that comes from an employer match.
Central Bank is Here for You!
As a relationship-oriented community bank, we get to know our customers personally and offer customized financial solutions for your specific needs and goals. Learn how we are helping our customers during this challenging time and reach out to let us know how we can help you manage your money better!