What Coronavirus Means for your Finances
By now, you’ve heard the 24/7 news alerts about the coronavirus and its quick spread across the globe. Besides the risks to your health, an epidemic will also have an effect on the economy and your money - the SARS epidemic alone cost the global economy over $40 billion! People still can’t forecast the impact the coronavirus will have, though it already has seen a ripple through China, the world’s second largest economy.
What money moves should you be making (if any) during the coronavirus?
Make sure you have an emergency fund set up
It’s always a good idea to have a 3-6 month emergency fund set up for any unexpected expenses. This is especially important during an epidemic, because you never know if you need to pay for medical bills, some time off work, or help out family members. If you don’t have this amount saved up already, you can start working towards it.
If you are already in the stock market, don’t panic sell
If you’ve recently seen your investment and retirement accounts drop significantly, don’t worry., you’re not alone. The coronavirus has impacted a lot of companies and their supply chains and business operations. This has made the stock market extremely volatile (it’s moving up and down a ton). The market will recover in the long run, so don’t panic sell your positions. If you aren’t invested in the market, this might be an opportunity to buy for cheap.
It could cost you less to borrow money
The Federal Reserve recently announced an emergency rate cut because of the coronavirus. Why? Epidemics mean people are scared and don’t spend. What this means is that it might be cheaper now to borrow money - if you’ve been looking into refinancing your student debt or buying a home, now may be the time to prioritize it as rates are really low.
If you have travel plans, you might want to have insurance
If you have any upcoming travel, make sure you either buy insurance (just double check the fine print) or look into what different airline or hotel policies are. This ensures that you won’t be stuck with a bill for a few thousand if your travel plans end up falling through because of the virus.
P.S. The coronavirus is changing day by day, so this story may change! In the meantime, protect yourself and your community from coronavirus by washing your hands, staying home when sick, and listening to local authorities. Stay calm, and your coworkers and neighbors will thank you.
Disclaimer: The information provided is for informational purposes only, to assist you in managing your own finances and decision-making. Snowball Wealth is not a financial advisor, investment advisor, financial planner, fiduciary, broker, bank or tax advisor. Accordingly, before making any final decisions or implementing any financial strategy, you should consider obtaining additional information and advice from your accountant or other financial advisors who are fully aware of your individual circumstances.