The coronavirus has had an immense impact on our physical well-being, as well as the economic health of individuals and families across the globe. Businesses are being forced to cease operation, leaving people worldwide jobless at record rates.
Roughly 22 million Americans filed unemployment claims over a four-week period starting March 14 - marking a record-breaking high for the U.S. Department of Labor.1 These unprecedented numbers serve as a sign of the times, as everyone everywhere struggles to make ends meet amidst this global pandemic.
For those struggling financially, the immediate question becomes - What should we be doing now to begin recovering from this? We have three critical next steps for those impacted by the first-hand economic effects of the COVID-19 pandemic.
Step #1: Reevaluate Your Spending
Whether you’ve experienced a sudden stop in income altogether, a decrease in your paycheck or you’re now reliant on financial assistance from the government, any change in your normal cash flow is cause for a reevaluation of your spending.
While it may sound like an obvious step to take, it’s one that should be done immediately and with care. If you already have a weekly or monthly budget in place, look it over and determine what non-essential costs you could eliminate. As you’re doing this, it’s important to remember: businesses you typically frequent are likely not operating anyway. If you normally budget for a night at the movies every month, weekly dinners out, etc., consider reallocating this “fun money” to cover more essential expenses. Or, you could use it to start or contribute to an emergency fund.
Step #2: Acknowledge the Change
This is an unprecedented time, and it’s affected the lives of nearly everyone across the globe. People in a wide variety of industries - hospitality, retail, food, travel and more - have been left jobless for the foreseeable future. On top of this immense stressor, we’re all fighting the spread of a deadly virus.
If this has made you stressed, angry, sad, devastated - it’s okay. You’re human, and your reaction is justified. But when it comes to standing tall and moving forward financially, the sooner you can recognize the emotional toll these global events have had and come to terms with the “new normal,” the sooner you can begin planning ahead.
An important part of this acceptance is recognizing any bad habits you might have, specifically financial spending habits triggered by stress. Maybe you’re someone who likes “taking the edge off” with online shopping or use eating out as a way to cheer yourself up. Whatever it may be, now’s the time to practice restraint and remember that these are emotional responses to what’s happening around you. That money may be better spent elsewhere (or tucked away in a savings account).
Step #3: Be Aware of Changing Policies
Governing bodies and private companies alike are working to accommodate out-of-work citizens. Both the United States and Canada have passed legislation in an effort to amp up benefits for unemployed individuals, and even local governments are attempting to offer relief as well. For example, some local governments have made it illegal for power and utilities to be shut off due to a missed payment during the pandemic. Others have urged landlords to halt rent payments temporarily.
Even some insurance agencies and gyms have paused memberships or reduced rates in an effort to accommodate out-of-work individuals. Write down every monthly bill you owe, and begin contacting those companies or agencies immediately. They may not have a forgiveness policy listed on their website, but they may be willing to assist you if you explain your situation - especially since so many people are in a similar spot.
Feeling uncertain about the future ahead has become the new normal amidst the COVID-19 pandemic. And if you’re struggling financially, you aren’t alone. There are resources available to you now, such as stimulus checks and unemployment insurance, to help make this time a little easier. If you’re still worried about what comes next, speak to your financial advisor immediately. Together, you can work on developing a solid plan for moving forward.
Click here to schedule a call with a BWC advisor today.
The information presented in this article is obtained from or based on sources believed to be reliable. BWC does not represent or warrant its accuracy or completeness and is not responsible for losses or damages arising out of errors, omissions or changes or from the use of information presented in this article. The article does not purport to contain all the information that an interested party may desire and, in fact, provides only a limited view. Information presented does not constitute an offer to sell or a solicitation of an offer to buy any security.
All investments involve risk, including loss of principal invested. Past Performance does not guarantee future performance. Individual client accounts and performance vary. BWC does not provide tax advice.
About Beirne Wealth Consulting Services, LLC – www.beirnewealth.com
Beirne Wealth Consulting Services, LLC (“BWC”) is a privately owned, SEC Registered Investment Advisor with offices in Connecticut and Pennsylvania. BWC provides independent, fee-based investment management services and customized financial planning solutions. Our institutional business provides consulting expertise to defined benefit and defined contribution plans, endowments, foundations and non-profit organizations. Our private clients include high net-worth individuals and prominent families, many of whom bring complex wealth management challenges and multigenerational planning needs. For more information, please visit www.beirnewealth.com or give us a call today at 888-231-6372.
*Registration does not imply a level of skill or training.
© 2020 Beirne Wealth Consulting Services, LLC (BWC). All rights reserved. Reproduction or Use without permission is prohibited.