It was impossible to be ready for this, and obviously, having money saved up helps in pretty much any hardship. But if you don’t, like most Americans, it’s too late to beat yourself up about it. It’s time to focus on what you can control
Photo: Lambert/Getty Images It’s surreal to be living in the middle of a worst-case scenario. Just think: From now on, financial advisers will say, “It’s important to have an emergency fund, just in case there’s another global pandemic, you know?” And whoever’s listening will nod, like it’s a totally normal thing to plan for.
I don’t know how to talk about any of this stuff, really. We don’t know how long the coronavirus will last, or how badly it will damage the economy, or what the recovery will look like. But here are the best answers I can give to the questions I’ve gotten this week, with help from financial veterans who’ve weathered big downturns before. It’s scary out there. Be good to yourselves.
Here’s what you should not do: put stuff on your credit card if you can afford to pay for it outright. Research shows that people have a tendency to do this when they’re stressed about money, but it winds up costing them extra in the long term when they have to pay interest on those bills later. Alternatively, if your income dries up and you do have some savings, now is the time to tap into them. This is what emergency funds are for!No! Definitely not.
Everyone I spoke to reiterated that if you’re already observing generally good financial habits, stay the course. Which is to say: Keep putting money in your retirement portfolio and make sure it’s diverse. Keep paying your bills. Keep saving extra cash. And try to put this all in perspective. Historically, there have been about 17 recessions in the history of the United States, and experts are notoriously bad at predicting them.
The federal government’s giant new stimulus bill, passed last night, should also provide some relief. It’ll boost standard weekly unemployment benefits by $600 per week for the next four months, and expand unemployment insurance to people who don’t normally qualify for it — like freelancers, independent contractors, and furloughed workers.
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