Nearly nine out of ten Americans say that the COVID-19 pandemic has brought stress to their personal finance plans, according to a survey from the National Endowment for Financial Education (NEFE). This survey also showed that most people are concerned with not having enough saved and being able to pay bills.
The COVID-19 outbreak is causing people to make tough choices regarding their finances. Are you in this boat? If so, you likely have to accept some unpopular truths to weather the storm of these uncertain times.
Here are some hard, but necessary financial truths that you need to consider as you move through these difficult times.
You May Need to Relocate
Yes, ten years ago, the move to that metro area seemed like a great idea. You may have moved for a job offer, or wanted to be closer to family. However, things may be different now, and that once-bustling city may now be a liability. Unfortunately, it may be time to switch zip codes. In 2018, the U.S. Department of Labor found that the cost of living in the country’s largest cities had grown the fastest within the past ten years. If you live in a larger city and have seen a decrease in income due to the COVID-19 outbreak, it may be time to relocate.
You May Need to Find a New Career
This truth can be a hard one to come to terms with. This is especially so if you received specialized training for your current position or have worked in your industry for years. Nevertheless, the current coronavirus pandemic is single-handedly bringing many companies to their end. It’s also pushing many industries to their breaking points.
As a result, it may be time to look at starting a new career. You don’t have to start from the bottom with this. Begin looking at other skills you may have. Is there something you’ve always wanted to do but never got around to? Is there a profession for which you can receive online training? Start doing your research and assess your options.
You May Need to Delay Your Dream of _________
Have you always wanted to take the kids to Disney World? Were you planning on buying that new house? How about that new car? It can be tough to have to put some of your dreams on hold. The COVID-19 crisis has brought many things to a standstill. However, it’s understandable that delaying personal dreams can hit home.
In many cases, you will have to change your perspective. Your goal should be to ensure the economic survival of yourself and your family. And this goal may mean that you have to delay some of your dreams. It’s important to remember that things won’t always be this way. However, currently, you may need to make changes now to reach these milestones in the future.
You Need to Learn How to Handle Money
If there’s one thing that the virus has exposed, it’s how much we all need to become better budgeters and better savers. In short, we need to get ultra serious about handling our money — regardless of how much or how little we may have.
Besides getting sick with COVID-19 or dying from the disease, one of the most scary aspects of dealing with the pandemic is that it has caused massive economic uncertainty.
Millions of Americans face reduced work hours, lower pay or outright job loss. Even those who have been able to collect unemployment worry about when it will run out. Needless to say, if you don’t have a hefty savings account or a steady payment, it’s natural to be concerned about having enough to pay the bills.
Understanding the importance of budgeting is critical here. You want to add an extra layer of security to your overall personal finances by having a plan. If you know where every dollar is going, you can cut cost where you need to and prioritize your spending. Learning how to handle money today can take away some of the stress of surviving these challenging times.
You Must Learn How to Invest Your Money
Yes, the stock market may feel a bit uncertain—especially now—but this isn’t the time to abandon investing. You should indeed be smart and intentional about where you put your money. However, that doesn’t mean that you should pass on making investments. In fact, even as the economy as a whole has been faltering during the COVID-19 outbreak, the stock market has been booming.
A recent interview with investor Teri Ijeoma revealed that some of the best times for investing is during a downturn, as some popular stocks are priced much lower than they usually are. This event then allows you to diversify your portfolio so you can take advantage of the upturn since the market often rebounds, or moves in cycles.
Also, like Teri, you can learn the art of “active trading” to turn investing into a lucrative passive income stream that generates extra money, there are sites online where you will find professional traders, that will give you the best information about trading the financial markets. You can profit from their experience and learn how to become a successful trader.
You Can’t Keep Saying YOLO and Splurging Any More
Unfortunately, the truth is that you could lose your income stream today or tomorrow due to coronavirus. This hard financial truth means that you have to be careful about how you are spending. Every financial move you make has to include caution and a forward-thinking mindset.
Yes, there are times to enjoy yourself and buy something you want. However, you want to avoid making this a constant habit. You never know when you will need that $100, $500, or $1,000 you spent on a non-essential item for rent, a health-related bill, or groceries.
Your Priorities Have and Will Shift Whether You Like It or Not
All of these uncomfortable personal finance truths add up to this concept: your priorities will have to change. Things that were important a year or even seven months ago are no longer significant. Your goal is to ride the wave of this new normal successfully. This step will automatically cause what you care about to shift.
Building an emergency fund will be more crucial than dining out every day. Additionally, budgeting will be a more important activity than buying the latest smartphone. The sooner you understand these points, you can accept them. Ultimately, this will lead you to decide to move forward with addressing these uncomfortable truths, so you handle any financial obstacles that coronavirus throws your way.
For more personal finance tips to get through COVID-19, read 3 Personal Finance Professionals You Need on Your Dream Team