How to Financially Survive the Coronavirus Pandemic

by Josh Biggs in Finance on 4th August 2020

The coronavirus pandemic has had a devastating effect on everyone. In the United States alone, nearly 130,000 people have died, and with the virus still raging, this number will only go up. But the pandemic has also had a devastating effect upon people’s finances. Millions of people have lost their jobs, leaving them in precarious financial situations, and this will likely continue for some time to come.

To financially survive the pandemic, you may need to make adjustments to both your sources of income and how you spend your income. Here are some suggestions for doing this:

1. Get a Personal Loan

One of the best ways to supplement your income during trying economic times is through a personal loan. With interest rates currently at historical lows, you can obtain a variety of personal loans at a very low cost. What’s more, you can get a personal loan even if your credit score is only fair.

As an alternative to a loan, you may also want to consider getting a personal line of credit. Unlike with a loan, you only pay interest on the portion of the line of credit that you actually use.

2. Get an Interest-Free Credit Card

As stated previously, interest rates are currently at historical lows. Because of this, now is a great time to shop for a new credit card. Many financial institutions are offering cards with 0% interest on purchases that extend well into the future, possibly even beyond the duration of this crisis. While you should not overdo it, using a credit card with 0% interest can be a great way of maximizing your cash during the pandemic.

Many of these credit cards also offer excellent reward benefits, allowing you to save lots of money on your purchases.

3. Conserve Your Cash

In an economic crisis, cash is the most important asset that you can have. By having a sufficient amount of it, you can be certain that you will be able to meet your most immediate expenses. So, do everything that you can to maximize your cash right now, including making only the minimum payments on your debts, such as credit cards.

Keep in mind that you do not have to keep your cash in a checking account or in a low-interest savings account. You can also securely keep it in a money market account and earn a decent amount of interest.

4. Be Careful How You Spend Money

The flipside to conserving your cash is spending less of it. So, you should sit down and analyze all your monthly expenses. If there is anything that you absolutely do not need, you should forego it for as long as the crisis lasts. You should also look for ways that you can spend less on the things that you do need, by buying cheaper alternatives or reducing your monthly bills.

Sometimes saving money requires lifestyle changes. For example, if you eat out often, consider preparing your meals instead, which can save you a lot of money in the long-term.

5. Get a Personal Loan

One of the best ways to supplement your income during trying economic times is through a personal loan. With interest rates currently at historical lows, you can obtain a variety of personal loans at a very low cost. What’s more, you can get a personal loan even if your credit score is only fair.

As an alternative to a loan, you may also want to consider getting a personal line of credit. Unlike with a loan, you only pay interest on the portion of the line of credit that you actually use.

6. Reduce Your Retirement Account Contributions

If you make regular contributions to a retirement account, such as to either a 401(k) plan or an individual retirement account (IRA), you may want to temporarily reduce these contributions for the duration of the crisis. This can help you maximize your cash, and you can always adjust these contributions upward after the crisis ends.

You should also be aware that the recently enacted CARES Act eliminated the withdrawal penalty for retirement account distributions made during 2020. But you should only consider withdrawing money from these accounts as a last resort.

Summary

You not only have to physically survive the coronavirus pandemic, but you must survive it financially as well. By following the suggestions outlined in this article, you can do the latter, even if the pandemic continues on for many months to come.

Categories: Finance