When you’re unsure about what lies ahead, it is time to turn to an expert.
Seth Godin spoke about how you can learn how to fly a plane on YouTube but would you want that person as your pilot? You can learn how to remove a spleen on Google but do you want that person performing your surgery?
While we aren’t experts in global pandemics, we’re on our sh*t when it comes to managing finances. We’ve pulled together a list of 5 moves you can make to help you financially thrive in a climate that’s doing the opposite:
1. Do not pull your investments.
The ultimate end goal in investing in the stock market is to buy low and sell high. We’ve all heard it a thousand times. But when instability sets in, our knee-jerk reaction is to ditch everything that has a chance of failing. When looking at an individual stock’s history to determine whether or not you should invest, there is generally no pattern. However,
there is a pattern for those with a diversified portfolio: up and to the right.
Selling your investments when you see a dip in the market will cause you to flip that day-one knowledge of buy low and sell high. We know better. And remember: you haven’t actually lost money until, and unless, you sell at a cheaper amount than you purchased.
2. Take advantage of low interest rates.
Negotiate a lower APR for your credit card. There are plenty of cards offering introductory rates. This point won’t help you if you don’t carry a balance (also, congrats! It’s a good thing if this tip doesn’t apply to you because it means you’re using a credit card properly). And if you’re not one for confrontation, Ramit Sethi gives you an actual script to follow when calling your credit card company. It has also never been cheaper to borrow money than it is right now. Refinancing your home under these circumstances could save you hundreds of dollars per month.
3. Be careful with forbearance.
The word “forbearance” has been thrown around more in the past 4 months than you’ve heard in your entire life. Essentially, it means a temporary relief of regularly scheduled payments. While on the surface, not having to pay a few months worth of your mortgage/student loans/credit card bill/whatever may seem like a nice break, there’s a chance the lump sum of that payment is due the day the forbearance ends. Let’s keep the numbers friendly in this example: your mortgage payment is $1K/month. You choose to participate in loan forbearance for 3 months. That $3K isn’t just pushed on to the end of your 30-year loan and spread over the remaining time. No chance. What actually happens is – you guessed it – $3K is due on day 91. Which, at the end of the day, isn’t much help at all. Make sure you’re reading the fine print.
4. Time to DIY.
(that’s how you found yourself on a blog anyway, right?) Take the time you’re working from home to fine-tune your cleaning/mowing/cooking/general life skills.
Bananas should tremble at your abilities with a bread pan.
Use mowing the lawn as a stress reliever and quick escape from a home office. Some people find unloading the dishwasher therapeutic. Let us know if you meet one of those people. Here’s your opportunity to save stress and dollars. Eh, this was a weak point, wasn’t it? JUST OUT HERE TRYING TO SPREAD SOME OPTIMISM.
5. Understand what your health insurance does and does not cover.
If you don’t have a clear understanding of what your coverage looks like, now is a pretty good time to figure that one out. It’s as easy as reaching out to your company’s HR department and have them answer any of your questions. If you don’t have an HR department ready and willing, Healthcare.gov put out a pretty great piece that’s a one-stop-shop for deciphering Marketplace Coverage.
6. BONUS: What to do with a potential second stimulus check:
Buy a Stash Plan®? For one, that stack you’re sitting on in your savings account is likely collecting less than 1% worth of interest. Let’s get that money working harder. Second, this is the time to lean on an expert. We have a full team of specialists ready and able to step in. Covering tax hacks, goals-based investing, insurance, and the questions you don’t even know to ask. Reach out to [email protected] and we’ll hook you up with a promo code when you mention this blog post.