As parts of the country start moving into reopening after coronavirus lock downs, it’s time to start thinking about how to restart your own personal finances when the restrictions end. So, how do you restart finances while the country is restarting economy?
Going Back To Work
Despite all the news reports, protesters, and talking heads on television, the decision to go back to work or not is a deeply personal one rooted in your own personal circumstances.
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First, assess your own personal health risk situation. As many reports have noted, certain people seem to do worse than others when it comes to contracting the coronavirus. Although there are numerous reports of otherwise young, and healthy people ending up in the hospital, the odds still look the worst for those who are older, or that have preexisting conditions. If you can’t safely return to work, it is time to start looking into what your possible options are.
Be sure to check out unemployment programs. Even if you may not have qualified in the past, the rules have been changed, and benefits are more generous with a $600 boost for many unemployed people. The maximum length for receiving unemployment benefits has also been extended. This program may give you a long enough amount of time to feel more comfortable returning to work, especially if there are better treatments developed, and mitigation efforts take hold.
Returning to Work
If you are returning to work, take an assessment of where you are financially since leaving. For the most fortunate, continuing paychecks may mean little disruption in your finances. For others, a month or more of missed earnings can make things very tight.
A look at average IRA fees.
Again, be sure to check into whatever programs are available to you. There is no shame in getting government, or charitable help after these bizarre circumstances. No matter what is said or implied, you can’t be faulted for not being prepared for something that has simply never happened before.
Personal Finance Assessment
If you have skipped paying any bills or other payments, start by making a list of who you owe, and how much. Contact those people and see if they will work with you on a payment plan, or other options. Keep in mind that you are not alone, and that a lot of people are in the same situation. What makes you different is reaching out to see what you can do.
The idea is to avoid as much long-lasting damage to your credit report as possible.
You will likely have the most luck with larger entities who have likely put policies and procedures in place to handle things. For example, your local utility company likely has a way to make payments. Your mortgage company may also have a way for you to make up any shortfall without any harm to your credit report.
Although I never advocate timing the markets, now may be the time to shut off voluntary contributions to things like your 401k plan. Avoid withdrawing funds from such plans, but it turning off a $400 a month contribution helps you dig out of a hole, it’s a wise move, but only as long as you turn it back on as soon as possible. The markets will rebound, and you will get closer to retirement. You want to be dollar cost averaging through these down times.
Next, check on any insurance policies you haven’t paid and see if the insurance company just has you as late, or if your policies have actually lapsed. Not having coverage when something happens can be even more devastating that having lost a few months of income. If your policies have lapsed, they’ll have a way for you to get them back in force.
Finally, if you have raided your savings, don’t feel bad about that. However, as your feet get back under you, get working on rebuilding those savings. They helped save you this time, they can do it again next time, but only if you rebuild them before whatever the next time is.
Remember this is a hard and stressful time for everyone. Do not take any of this as an indication of your character or ability. There simply has never been a time when the economy was just shut down. All you can do now is put your head up and move forward. Hopefully, the damage can be fixed and you and your finances can move forward.