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6 Money Recommendations For These Uncertain Times, From A Financial Coach

Here are a few things you can start doing today to navigate this coronavirus crisis:


This pandemic is real, and so is its impact on our pockets. With the market volatility and all the uncertainty surrounding the coronavirus, it’s completely normal to have financial concerns and to have fears about making financial decisions. 

Similar to this outbreak, there are many aspects of our personal financial lives that are out of our control, but staying informed and taking action on some key areas can help you navigate these challenging times and make a difference in your financial future.

Here are a few things you can start doing today to navigate this coronavirus crisis:


1. Review Your Budget & Financial Plan

This is an ideal time to sit down and review your budget and financial plan. Before you do, make sure you’ve understood the impact this crisis may or may not have on your income. Talk to your employer openly about your pay and benefits, such as paid sick leave and paid family leave, as well as your eligibility for the Coronavirus Response Act. 

If your income will be impacted, it’s time to take some financial measures. First, stop any aggressive debt payoff strategy you might have in place and pay the minimum payments on your debt. You should take this time to contact your service and utility providers to learn about their relief programs due to COVID-19. You should also contact your lender to see what policies they’re implementing that can help you. Keep in mind that while placing your loans on forbearance or deferment can postpone your payments and provide support during these times, most likely you will continue to accrue interest. 

If your income won’t be impacted then I recommend having a solid written budget, increase your savings to build up your emergency fund, get rid of unnecessary expenses, accelerate your debt pay off journey, and start investing. Keep moving forward with your goals and as things go back to normal, markets will start to recover, and you will be in a much better position to start investing for the long term. 

Click here if you’re looking for a FREE budget template and other useful financial resources.

2. Don’t Let Emotions Control Your Investments

Nobody can perfectly time the market and jumping off while it’s going down is never a good idea. There’s a lot of uncertainty and fear right now with how the markets are behaving. Don’t let emotions drive your decisions into selling or cashing out your investments (stocks, 401(k), mutual funds, etc). One thing is to have paper losses, and another is to cash out and make those losses real. Looking back into history i.e. dot com bubble, Y2K, 9/11, and 2008, the markets recovered and bounced back creating a hefty return for those who stayed and got into the game. 

Markets have significantly declined as a result of the virus, but before you get any ideas on jumping into investing, make sure that you’re either sitting on cash or have an emergency fund in place. If this isn’t you, you have to secure some level of financial security first. If this is you, then you might be well-equipped to take advantage of this situation early on and ride the long-term investment wave because this is money you can risk, and markets won’t recover in 1 day to create positive gains. Our recommendation is to invest regularly either on a weekly, bi-weekly, or monthly basis for the long term -- and if possible, to continue investing in your 401(k).

3. Evaluate How You Could Benefit From Low Interest Rates

Although the Fed has taken an aggressive move to incentivize the economy, rates have not stayed as low as people think. Since this measure was implemented rates have gone up on average .50%. Some headlines might focus on the fact that they have not stayed as low, but it doesn’t mean you couldn’t benefit from low rates.

A lower interest rate means the cost of borrowing is going down, and your existing credit line i.e. credit cards, home equity lines, lines of credit interest rates will go down; saving you some money on interest. However, by the same token CDs and Savings Account rates will go down as well.

When rates go down it makes it a perfect moment to refinance existing debt (mortgage, auto, revolving debt, student loans*) to reduce your interest cost and pay it off faster, saving you money in the long run. Make sure you contact your bank before starting a refinancing process. For example, some banks are implementing moratorium on refinancing. This means you won’t be able to refinance the loan.

Do not overlook some of the costs associated with refinancing. Most of the time when you refinance there are closing costs to consider, which can add up to the size of your loan and the interest you accrue. Plus, if you extend your repayment period when refinancing, you can expect the lifetime cost of the loan to increase as well. It’s important to run your numbers or sit down with a professional on the long-term cost of your debt and look at how much interest you’ll pay in total. A lower rate may be enticing, but it’s not always worth it.

*Keep in mind that if you decide to refinance your federal student loans, that permanently strips your loans of government-backed protections such as income-based repayment, deferment/forbearance and some loan forgiveness programs

4. Understand What The Student Loan Interest Waiver Means To You

The U.S. Department of Education is delivering on President Trump’s promise of issuing a student loan interest waiver on federal student loans. If you’re a borrower, the interest rate of your loan will automatically be set to 0% for at least 60 days starting March 13. You will also have the option to suspend your payments for at least two months without worrying about accruing interest. In addition, once the new Economic Relief Plan becomes law, student loan borrowers will get a reprieve from payments until September 30th and any interest accrued during that period would be waived. 

What this means to you varies depending on your current financial situation.

If your financial condition is not being affected by this crisis, and you can continue making your payments or even make extra payments, then this provides you with an opportunity to significantly reduce your loan balance and the amount of interest that will accrue once it resets. All your payments during this time will be applied to the principal balance.

If your financial condition is being affected and you cannot make payments, then you should call your loan provider to make sure that you are receiving the interest waiver, and placing your loan in forbearance without accruing interest. This way you can save some cash and avoid interest.

5. Be Smart About Your Tax Filing

The Treasury Department and the IRS have moved tax filing and payment date to July 15.

According to Steve Mnuchin, Secretary of the Treasury, “All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.”

Keeping money in your pocket during this time might feel like the best thing to do However, if there’s someone you don’t want to owe money to — is uncle Sam. I strongly recommend not spending the money designated to pay the IRS and saving as much as possible. Spending money owed to the IRS now increases the risk of not being able to save it by the due date of July 15.

If you’re owed a refund, then file as soon as you can to collect on that money.

6. Talk To An Expert

If you haven’t considered working with a financial coach or planner, this is the time to do so. In a time filled with uncertainty and where so many people are being impacted financially, a financial coach that will act in your best interest can truly provide you with the peace of mind that you need right now, and set you up for success in the future.
myFinTect is now offering a special one hour virtual consultation with a financial coach to answer your money-related questions in these uncertain times. In addition, we believe financial coaching doesn’t have to break the bank, so we offer affordable memberships that will help you get in control and organized with money, bringing you one step closer to financial well being.

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