Essential Money Tips for Surviving the ‘Pandemic Spiral’
Essential Money Tips for Surviving the ‘Pandemic Spiral’
By Gabrielle Olya February 18, 2021
Take a deep breath before you spend more.
In a story for The Atlantic, writer Ed Yong put forth the idea that, thanks to the coronavirus, America is stuck in a "pandemic spiral" that's destroying, among many things, their budgets.
"Many Americans trusted intuition to help guide them through this disaster," he wrote. "They grabbed onto whatever solution was most prominent in the moment, and bounced from one (often false) hope to the next. (...) The country is now trapped in an intuition nightmare. (...) Americans are walled in by their own unhelpful instincts, which lead them round and round in self-destructive circles."
While trusting your instincts can be productive, it can also sometimes be disastrous -- leading to financial ruin if you're "going with your gut" with every money decision amid the pandemic. Here are a few money tips that may go against your gut reaction, but that can save you from ending up broke by the end of the coronavirus pandemic.
Prioritize Emergency Savings
Yong said it's easy to fall into a "normality trap" when dealing with a crisis, as people want to return to "normal" ASAP rather than facing the uncertain world we are now in. Put into financial terms, you may be maintaining your normal spending behaviors if you're not one of the millions of Americans who have lost their jobs due to COVID-19. But just because you haven't lost your job doesn't mean that you won't, as the economy is still rocky for many sectors. Given this uncertainty, it's important to prioritize your emergency savings.
“As the COVID-19 pandemic makes clear, financial stressors can strike with minimal warning,” said Greg Klingler, CFP, ChFEBC, director of wealth management for the Government Employees’ Benefit Association. “An emergency fund is a crucial part of your budget, and you may need to contribute a bit less to your savings (retirement or debt payments) and/or wants (entertainment, clothes, etc.) to establish and fund it. All Americans should maintain three to six months of expenses in liquid cash.”
Cut Costs Where You Can
In order to save more, you will likely have to spend less. If you're saving money by not commuting, not traveling and going out to eat less, save that money rather than blowing it on online shopping or panic buying.
Put Your Savings Into a High-Yield Savings Account
With the economy in its current state, you may be wondering if your money is still safe in a bank. Do not panic -- the Federal Deposit Insurance Corporation covers up to $250,000 in each bank account, which means that even if your bank fails, your money is fully protected by the U.S. government.
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