How to Safeguard Your Finances from Coronavirus
If you’re worried about coronavirus (or COVID-19, which is the particular strain of coronavirus that’s currently spreading quickly across the world) that’s completely understandable. News coverage of the outbreak is nearly constant and many countries are taking drastic measures to curb the spread.
How worried you should be is dependent on a number of factors, from your age to your overall health to where you live and where you’ve recently traveled. Even if you aren’t worried about the possibility of infection, there’s a very strong chance that you will eventually be impacted in some way by the virus.
COVID-19 has already had enormous ramifications for the global economy and those ripples will inevitably reach consumers and workers across the country. To lessen the impact and prepare yourself for some of the possible outcomes, consider these steps to prep your finances for coronavirus.
It is extremely tempting to load up on everything you think you might need for the months ahead and hunker down until the worst of the outbreak has passed. And while minimizing inessential person-to-person contact is definitely a good idea during an outbreak, buying your local Target out of toilet paper and Clorox wipes isn’t the way to go.
For starters, it’s vitally important that you be smart with your money right now (for reasons we’ll explore in a moment). Secondly, there’s the matter of everyone else who needs a reasonable supply of those items. Mass overbuying leads to shortages, which both drives up the price for remaining goods and leaves a lot of people empty-handed.
Finally, take a moment to consider who’s most at risk during the outbreak. The elderly and the immunocompromised face much starker odds should they become infected. If you don’t fall into either of those categories, try to be reasonable when you stock up. Quarantines tend to last for 14 days – when stocking a preparedness kit, buy only what you and your family may need for two weeks.
Reduce Expenses Where You Can
One of the most effective ways to slow the spread of a disease is to keep people away from other people. This may mean that your place of work is shut down for a period of time. For many people, not working means not earning any money.
That’s why it’s crucial that you ramp down your spending before a work stoppage. There’s no way to know exactly how the COVID-19 outbreak will play out, but it’s almost certainly going to get worse before it gets better. So if you’re working now and everything seems business as usual, act like it isn’t. Reduce spending on non-essentials and prioritize saving money – at least until the worst is over.
Don’t Make Non-Refundable Travel or Event Plans
SXSW, an enormously popular film and music festival in Austin, Texas – with historically pricey tickets – was recently canceled. And at the moment, it looks like ticketholders aren’t going to get a refund. Coachella, another wildly popular spring music festival, is moving to the fall, leaving attendees scrambling to cancel or rebook travel arrangements.
All over the world, major events and gatherings are being canceled or postponed in order to limit potential exposure to COVID-19. Again, it’s hard to know exactly when things will return to “normal”, so in the meantime avoid making travel plans or purchasing any non-refundable tickets.
If you've already purchased tickets for events that may be (or already have been) canceled, you may have some protection if you made your purchase with a credit card. Some cards offer travel insurance, which can help minimize some of your potential losses. Connect with your creditor to see what benefits your card offers and if they can help any sudden changes of plan.
Talk to Creditors and Lenders ASAP
Should you experience a disruption in income due to COVID-19, be sure to reach out to your creditors and lenders as soon as possible to let them know and see what they can do to help.
Banks in the United Kingdom are offering a three month deferment on mortgage payments. Italy recently declared a moratorium on all debt repayment. While we’ve yet to see what kind of financial relief will be available in the United States, major creditors are working to provide hardship programs for impacted customers.
As with any hardship, the sooner you reach out and start the conversation with your creditors the better. The same is true for medical bills. If you incur any expenses during this period - or even if you're still trying to repay an old medical bill - start a conversation with your provider about a repayment plan. Financial aid and assistance programs may be available, but you need to ask and advocate for yourself.
Being stressed and worried about COVID-19 and what it may mean for you is a completely reasonable reaction. The key is to avoid overreacting and potentially making the situation worse for yourself and others.
If coronavirus has you worried about your finances, or if you simply need help stabilizing your debts and expenses, consider speaking with a budgeting counselor. They can help you find ways to cut costs and potentially create a more manageable monthly payment for your debts. Counseling is free and available 24/7.