Money Tips in the Time of the Coronavirus
With the coronavirus quickly spreading the global economy is taking a huge hit.
The U.S. stocks had their worst single-day performance since 1987 and although they have recovered somewhat because of the promised stimulus from the government, the situation is still highly unstable.
With the economy entering unchartered territory, most people are worried now. You might be one of those wondering how to handle your finances in the time of the coronavirus. We have listed here a few ideas that you can use:
Leave Your Investments Alone
If you have investments, then you must be sorely tempted to sell them now and cut your losses. Experts are saying that’s not a good idea at all. The best thing for you to do, according to them is to leave your investments alone. By giving in to your fears and selling now to cut your losses, you are bound to lose money in the process.
Then there are those who are tempted to buy now because of the lowered prices, that might not be a good idea too. It is difficult to predict when the market is going to hit bottom. At the end of the day, you will not get a good deal after all.
When times are uncertain, there is a real temptation to take your money out of your investments and keep them in a safe place. Some put their money in savings accounts, others prefer to keep them as cash. Still, some prefer to invest in cryptocurrency believing that it is safe.
It’s never wise to keep so much cash. While gold also lost 11.26% during the same period that stocks fell, showing that it’s not nearly as safe as others suppose. Bitcoin, on the other hand, lost almost 50% of its value in just one day.
All of these point out the importance of leaving your investments alone. You just have to accept a certain level of risk and then to diversify your portfolio as much as you can.
Put More Into Your Emergency Fund
This is something that you should have done before the pandemic. It’s kind of late now to do it but you can still try.
An emergency fund is different from your savings fund. It is used to cover the cost of unforeseen circumstances. You should include it when calculating your long-term finances. It should not be a factor when you are planning to buy a house or a car.
Your emergency fund should be there for you to fall back on when you lose your job because of the pandemic. The amount of your emergency fund will depend on your expenses and your lifestyle.
Experts suggest that you should have money saved for three to six months of your expenses.
If your investments are in order and you have an emergency fund in place, then you might want to consider helping out others who are not as prepared. Continue to patronize the businesses in your areas as long as it does not go against the local regulations in place to fight the spread of the virus.
If you have friends or relatives in nursing homes some means of communication with the outside world.
The global pandemic is a real threat to the way we live but there are things that we can do to fight it. In terms of your finance, you should not panic but make the most sensible decisions possible.