Right now we are in the middle of one of the strangest and most stressful times
ever recorded the coronavirus has taken the world by storm and has not only
impacted our day-to-day lives but our finances as well but like any pandemic
like when it's all said and done well in this video I will share with you five
money mistakes you must avoid during the corona virus pandemic and if you're new
to the channel then hit the subscribe button below for more a life-changing
content number one not changing your spending habits right now most people's
lifestyles have changed many people are out of work or are isolated within their
homes and this obviously comes with an adaptation and their normal routines
well another aspect that needs to change during this time are your spending
habits you see if you are one of the lucky people who still has money coming
in from a paycheck or other sources of income then you're gonna be able to
remain afloat but only if you keep your spending in check now this doesn't mean
buying three new outfits this month rather than four this means buying
nothing more than your bare essentials in essence during this coronavirus
pandemic you want to spend as little money as possible and I will explain a
few reasons why first if you were still earning income at this time and then
your sources of income dry up you will have to start digging into your savings
or selling off your investments to finance your day-to-day costs this alone
can cause your financial state to digress and if you can't secure a new
source of income for months to come then you run the risk of really eroding your
wealth second spending more at this time will only add to the stress you are
currently feeling right now you are probably concerned about your job
security your health and your family and the last thing you need is to be
stressed out about preserving your wealth this is again why you need to be
spending at the bare minimum right now for instance if you routinely spend
$2,000 a month on living expenses and have $10,000 in savings then you
essentially have 5 months of runway if you lose your job and have to rely
solely on your say pretty stressful right well if you were
to cut out unnecessary spending and lower that to $1200 a month then all of
a sudden you buy yourself an extra three months worth of time in the event that
you lose your job the final reason you want to keep your expenses low during
the corona virus pandemic is to capitalize on investing opportunities
well I have seen my personal holdings drop by tens of thousands of dollars in
the past month I do realize that now is a great time to acquire great securities
at cheap prices which is why I have continued to invest during this
tumultuous time now I do not recommend investing at this time unless you have a
very solid financial situation but nonetheless this can be a great
opportunity to make money and one way you will have more money to invest is by
keeping all your routine expenses to a minimum number to not having an
emergency fund it is times like these when having an emergency fund is key to
maintaining your financial state for those who already have emergency funds
set up then this is your time to shine but for those who don't this is a great
opportunity to start funding this account if you are still working you
should begin saving every dollar in case you lose your job or the business you
own is forced to close most financial gurus recommend having at least three
months worth of living expenses set aside but the more cost you can stash
away the better now I realize that during this time you are just focusing
on keeping yourself afloat but one important point I want to point out is
that now is a great time to fund your emergency fund because saving money has
never been easier with restaurants sports arenas movie theaters and
virtually every other form of group entertainment currently closed cancelled
or banned for safety reasons there isn't as much to spend your money on a secret
tip that you can use to really get your emergency funds started is to complete
your taxes well the deadline has been extended to July 15th if you're
expecting a refund then the sooner you submit your return the sooner you will
get paid which can be the starting point for your emergency fund but if you are
expecting to oh the government come tax filing time then I would recommend you
defer this payment for as long as possible so you can keep as much cash on
hand as you doing so will allow you to continue to
buy the bare necessities you need during this time and help you ride out the
pandemic number three panic selling right now you might be looking at your
investment accounts and becoming anxious about whether or not you should sell off
your funds and keep the rest of your money in cash this is a thought that
millions of people are having right now but whatever you do don't go panic
selling all your stocks and ETFs while they are in the deep red that is unless
you absolutely need the cash in order to survive one practice I have used as of
late is called portfolio distancing it's kind of like social distancing but
instead of staying away from people you are staying away from your investments
and doing so will relieve the stress that this current market downturn is
causing one thing to keep in mind during this strange economic time is that you
don't take any real losses until you sell meaning that there is time for your
money to rebound historical market data over the last century tells us that the
markets will eventually come back roaring and if you join in on the
massive sell-off that is currently taking place then you can inflict a
lasting damage to your portfolio and retirement nest egg by buying high and
selling low take the 2008 recession as an example
numerous people lost their retirements because they panicked and sold their
holdings but this challenging time was followed by the longest bull market run
in history like I just said stock market fluctuations are all part of the
investing game but now is the time to maintain your emotional control and make
wise financial decisions in fact people's ability to control their
emotions is a major contributor to the current wealth and equity in the United
States you see during the Great Recession many middle-class investors
sold off their holdings even if they were in lost positions in order to
recuperate as much of their initial investment as they could however many of
the more affluent investors left their money in the market and over time their
holdings not only recovered but have led them to accumulating even greater levels
of wealth we are in a special time right now where you have the opportunity to
separate yourself from the rest of investors and by holding on and letting
your money rebound you will be in great shape when the corona virus pandemic
ends number four failing to revise your
budget I already mentioned that you need to keep your expenses to a minimum but
you should also be adjusting your budget trim your budget back for the next few
months of course you'll still need to pay for food housing insurance utilities
and possibly transportation to and from work if you're not working from home or
ordered to self isolate you may want to also indulge in one or two extras such
as streaming services to give yourself some means of entertainment while you're
at home over these next few weeks but if there are any extra costs in your
usual budget besides this consider cutting them out until life gets back to
normal put any extra money towards your
emergency fund revising your budget will also require you to prepare for expenses
you weren't expecting for instance you may have been sending your kids to
school every day but now that schools are closed you need to start paying for
child care or spend any more to keep them entertained at home when revising
your budget list out all the new expenses you have been incurring since
the start of the pandemic and work them into your current budget then compare
this against your new income or emergency savings tweak your budget as
needed until you find a workable solution to get you through the next
couple of weeks or months if you're really struggling you may have to take
out a personal loan to hold you over avoid credit card debt and payday loans
when ever possible as this could create a longer-term financial crisis due to
the high interest rates on these types of credit number five not refinancing
your lungs the Federal Reserve has slashed its rates to near zero and that
means interest rates on loans are very low refinancing your loans right now
could save you money over the long term and it could possibly reduce your
payments in the short term especially if you extend the term of the loan this
could also help make your monthly bill payments a little bit easier to pay
during this crisis of course refinancing alone brings new closing costs so it
might not save you money in every situation crunch the numbers to decide
whether it's worth it for you before you go through with it
you might also find it more difficult to refinance alone if you've already lost
your primary source of income because this is something lenders look at when
you borrow money in that case you should reach out to your bank to this
hardship assists in options and consider refinancing once you've gotten your
drawback if interest rates are still below the rate on your current loan
moreover many banks and credit card companies are now offering its clients
assistance in the form of payment deferrals waived fees and even some
cases no credit card interest accrual for a short period of time check to see
what your bank's policies are and consider taking advantage of any support
programs that offers this might enable you to divert some of the funds you'd
otherwise put towards debt repayment into emergency savings in summation we
are all trying to figure out how to navigate the current situation and how
this unforgettable chapter of our lives is going to end the best thing we can do
right now is try to prepare for it by getting our finances in order as best we
can and taking things day by day again I know that this is a very stressful time
right now for many people but what I want you to do is keep your head up I
know we will get through this and we're going to get through this together but
if you haven't done the things I have previously mentioned in this video now
is a perfect time to get your finances in order thanks for watching if you want
to go from the life you have to the life you deserve then hit the subscribe
button now
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