5 Ways to Boost Your Financial Health Amidst COVID-19
Financial decisions can feel complex and hard even under normal circumstances. If the current market volatility has you questioning what are the “right” actions you should take now, you are not alone. Here are five concrete ways for you to jumpstart your financial wellness even as the novel coronavirus pandemic continues.
Don’t touch your face or your 401k.
Time for some facts. Markets fluctuate over time and returns often come with risks. While COVID-19 is certainly adding unprecedented volatility to the stock market, it is critical to take a long-term view when it comes to investing. When it comes to investing in your retirement, the best thing to do is invest regularly and aim to have a monthly contribution of 10-15% of your total income.
Build Emergency Savings.
Unexpected times like these are precisely why an emergency fund of 3-6 months take-home pay is so critical. If you have an emergency fund to tap into, great job! If you are among the 40% of Americans who would find an unexpected $400 expense challenging to pay, you are not alone! However, there is always time to build your savings.
To start, dive into your finances from the previous month. Take a hard look at non-essential spending. Eliminating even small expenses, especially monthly membership fees, can quickly add up over time. If you’re new to the world of budgeting, the 50 / 30 / 20 rule is a great place to start. Set a goal of how much money you want to contribute to your emergency savings each month. Don’t forget to celebrate when you meet (or exceed!) your goal!
Refinance a Loan.
These decade-low interest rates could save you money if you choose to refinance your mortgage, private student loans, or other debts. However, keep in mind that federal and private student loans are different, and you could be losing benefits by adjusting your federal loan. Traditional advice is to refinance when rates are 1-2% below your current rate. Make sure to keep an eye on your closing costs, so you make a decision that takes all costs into consideration.
Make a Plan and Regain Control.
You can only control what you can control. The good news is that your financial decisions and behaviors are 100% under your control. Find your money zen - what spending habits make you happy? What do you spend money on that you have no memory of a month later? Which purchases sit on a shelf collecting dust or cluttering your space?
Take the time to build a budget and stick to it. Set up regular monthly investments. Build your emergency savings fund. Use this time as a boot camp to become a top-notch steward of your financial present and future. You’ve got this. To continue upskilling your financial capability, visit our Financial Wellness Center for our full suite of educational content.
This blog content was created in partnership with EVERFI. US Eagle Federal Credit Union is a member of EVERFI's Financial Capability Network, and we are proud to deliver critical financial education to our communities.