The Quarantine Financial Picture

During this unprecedented time, it’s not easy for many Americans to be thinking financially. A vast majority of us are out of work, some without knowing if there will be a work to return to. However, now, more than ever, is the time to look at your personal financial picture. With the economy slower than usual, opportunities have arisen to reevaluate your financial picture. Below are some of the ways you can take advantage of the opportunities in front of you and potentially turn this downturn into a personal upswing.

Understanding the Current Market

Let’s start by understanding what a market is and what we are seeing happen in “the market”. The economic marketplace is where securities (or investment vehicles) are traded every day. It can also be used to describe a group of people who want to buy similar products (like the housing or fashion markets). 

Right now, the market is attempting to recover from a drastic drop-off that, according to many experts, has hopefully passed its bottom-most point. Shares of stocks are changing day by day as usual, but the trend of an up day followed by a down day that we saw at the beginning of the global crisis seems to have ended. As of mid-May 2020, the DOW, S&P 500, and NASDAQ Indices have been on a slow steady climb since late March. This is being taken as tentatively exciting news, with many hoping that this means the worst of this downturn is behind us.

So what does all of this investor mumbo-jumbo mean for you? For starters, money is going to be tight for a little while longer. For starters, jobs are going to be in high demand as soon as businesses are allowed to reopen. While it’s true that many businesses are going to try to give preference to the staff they had when they went into lockdown, many are likely going to need some extra help while reopening. So, if you’ve been considering picking up that side hustle, now may be the time.

Additionally, interest rates for the housing market are down. This means a couple of things with regards to home ownership. For those who already own (not rent) their home, this may be a prime opportunity to investigate a refinance of your mortgage in order to lower your payments. On the other hand, if you are currently looking to buy, this is your chance to get your slice of the real estate pie before the interest rate you will be paying for years to come goes back up. There may also be a spike of homes on the market once things go green since people will be able to visit homes in person again rather than virtually.

Finally, items such as banking are going to become much more complicated than they once were. Many banks are operating mostly through online services and/or their drive-through stations, in case you have to do something specific at a branch.

But this doesn’t have to spell oncoming poverty or personal financial crisis. In fact, this unusual time is presenting opportunities for Americans to stay ahead of their personal financial game. Here are some ways you can stay ahead of the curve.

Tips, Tricks, and To-Dos

Stay on top of the news. 

America finds itself changing daily: both from a standpoint of reporting on the disease, and from the standpoint of restarting the economy. In and among all the doom and gloom of the virus spread, there have been some government moves to help Americans during the financial crisis. By staying on top of what’s happening, you can remain engaged and capitalize on some of these measures/opportunities in order to ease the financial pain you experience while the world gets to a new normal.

Get your taxes in order now. 

While the Federal Government extended the deadline to file your taxes until June, they are also determining where your stimulus payments are delivered based on your most recent tax return. So, if you have changed addresses or banks in the past year, you have two options: file your information on the government’s direct deposit page and hope it gets processed before your payment gets issued, or file your tax return now so that they have your update information readily available.

This may seem like a small step, but it can help make the process of receiving your payments smoother. It can either be direct-deposited into your bank account, or at the very least sent to your most up-to-date address.

Keep making payments on your debt. 

During these times where many Americans are struggling to make payments, many companies have allowed delayed payments (removed). A specific example is student loans, where Federal loans have been put on hold (called forbearance) until October of this year to allow for those in economic hardship to allocate monthly payments to necessities.

However, the catch is any payments made between now and then will be applied directly to your principal, or the money you owe without including interest. No interest will accrue on your loans while they are in forbearance for the pandemic, which makes your payments much more useful for shrinking the gap.

Additionally, some companies are putting holds on payments now, but will expect you to pay back what you missed during the pandemic when businesses return to normal operation. While this is not an ideal setup, paying down this debt now allows you to stay closer to your normal payment schedule once things get closer to normal.

Increase your savings and rainy day funds. 

These types of situations are exactly what savings/rainy-day funds are built for. While you may have to pull from them here and there, you should make every effort you can to replenish them as quickly as you can so that you don’t fall too far behind. And if you’re not drawing from them just yet, keep feeding them as much as you can. That way, if you do wind up having to draw from them, it will last you a much longer time.

Although these are not times anyone could have possibly anticipated,they do not have to spell ruin for your personal financial picture. There are resources to help keep you on track, and tricks for along the way to help you stay on target for your financial goals. That way, when we do indeed come out on the “new side of normal”, you are not worried about your money situation and can focus more on adapting to the changes ahead. 

If you want to get started on this journey, there are a multitude of tools and resources available to you. Some are specific to situations, like Student Loan Hero and The Motley Fool. Others are more generalized: a personal favorite of mine, and a fantastic tool for learning the ins and outs of investing and money management, is Investopedia. Not only does this site help you keep track of the market and what it’s doing, but it also has a wealth of definitions and articles explaining all of the different aspects of investing, in case you had no idea what something meant.

Another go-to of mine is Magnify Money. This is a site that allows you to compare and contrast loans, savings accounts, and credit cards in order to find what works best for you. It’s an invaluable tool, especially with so much flux going on in the banking/lending world.

Finally, a tool I will recommend until the day I die is financial podcasts. I normally listen to an episode on the drive to and from the office and leave it at that. However, having been stuck at home, I’ve taken to throwing on episodes in the background while I work and I’ve made it through infinitely more content than I could have before. Among my favorites are Stacking Benjamins, Millenial Money, and Side Hustlers.

And, as always, if you have questions or concerns, reach out to your local financial guru. They are happy to provide you with all of the answers they can in order to help you stay on the straight and narrow when it comes to your personal financial picture.

Securities offered through Registered Rep of Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Marsico Wealth Management and Cambridge are separate entities. These are the opinions of Thomas Barton and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice.

Authored by Tom Barton, PYP Member and Financial Advisor with Marsico Wealth Managementfiled under: Press Release

Tags: covid, finance, money, new normal, pittsburgh young professionals, pyp, quarantine