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While things are really fluid right now and some big decisions are still up in the air, it's important to review and if necessary reprioritize things with your finances.
Today I'm sharing 4 tips to help you prepare your finances to weather out the tough times!
Shoring Up Your Finances for Tough Times
I usually don't do an episode on the weekends, but I'm making a special exception with everything that's going on.
Many, if not all in the community, are having their day to day lives change.
So today I want to quickly share a few tips to help you get some stability and get an idea of how the two of you can shift and reprioritize things so that you can ride out the tough times that come ahead.
Define Your Priorities with Bills and Your Budget
I hope you are doing well and staying healthy. It is insane how much of a difference one week makes. First off, let's talk about financial priorities right now.
I've gotten some emails from some of you in the community where you are living paycheck to paycheck and with hours being cut or you're having to work at home.
The question is, which bills should be paid first? Who's the most important?
As a reminder, have that foundation, make sure that you're taking those essential expenses like:
- your rent or mortgage.
- food,
- utilities
- transportation
These should be your priorities when your budget is tight or uncertain. It's absolutely crucial to make sure you have that foundation first.
Pad Your Financial Cushion
Your other priority right now is if you haven't already. Make sure your emergency fund is padded. The general rule of thumb is three to six months of essential expenses on hand.
However, depending on your situation, you may lean harder towards the six months rather than the three months. If both of you, for example, have jobs where the hours are now being reduced or one of you is out of work right now, and just a reminder, I do have a free course on my site called Five Days to 5K. And what that is, it's a week-long course.
I will walk you through the process step by step of how to find, save and make some extra cash on the side. That way you can build up that buffer. Just head over to couple money.com slash 5k.
I am by no means an expert on how things are going to play out, but judging by the news reason seeing what CDC is sending out, we're looking at something like at least eight weeks. So now would be a good time to look ahead budget-wise in April and May.
You want to review your budget because there's going to be shifts on certain expenses and you want to redirect money that you previously spent on expenses like lunches out or gas for commuting and move that towards that emergency fund your groceries and general savings.
Keep Your Pantry (Reasonably) Stocked
Third, make sure your pantry is stock. There is no need to panic and rush to the store.
Instead, have a careful plan for when you do go out and take care of that. And if you need a list on what to pick or to order.
Tap Into the Relief Resources
Also, if you’re not already a member of thriving families (and I’d love for you to be!), Andy from Marriage, Kids, and Money and I teamed up to do a special session How to Financially Prepare Your Family for Tough Times which you can now watch on YouTube.
We discuss how to prioritize your bills and start shifting your budget for the next few months.
We also dig into relief programs that are being offered by utilities, phone/cable companies, and federal programs.
For example, I just found out today that if you are a Coastal Credit Union member, they have a specific page for members to work through any hardships that you have and different programs.
Don't Mess with Your 401(k)
The other side of the coin is with a lot of uncertainty, some people are asking, what should I do with any savings or investments like a 401(k)?
I'm going to repeat advice Paula Pant gave, which is,
Your 401k is like your face: don't touch it.
Paula Pant @AffordAnything Mar 16
One of the most common things people tend to do when they are feeling uncertain is to pull out that money. But if you look at the historical data, that's a losing proposition.
Now, if you're in the position where you have the savings and you can and want to invest more to take advantage of the lower prices, that is fine, but otherwise, leave alone.
Instead, try redirecting some of that energy to things that you've been having on your financial to-do list because you can get more immediate returns from that.
As always, I'm here to help. If you ever have any questions, please reach out to me. I'm at @CoupleMoney for social media. Or, you can join our free and private Facebook group, Thriving Families. All of us are focused on helping one another out.
Resources to Manage Your Money Easier
- Best Budget and Money Apps:Personal Capital,Tiller,Mint,Honeyfi
- Grow Your Stash Faster:High Yield Savings with CiT Bank
- Automatic Saving:Qapital
- Jumpstart Your Marriage and Your Money
- 5 Days to $5K Course
- How to Financially Prepare Your Family for Tough Times
Her Dinero Matters
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Join Jen Hemphill, a former extreme frugalist turned reina of your money advocate each week for your dose of money confidence.
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The best part is, if you sign up now, you can use promo code DINERO at checkout for your first 30 days, free! So head over to the Himalaya app and check out Her Dinero Matters now.
Thank You to Our Sponsor Coastal!
Support for this podcast comes fromCoastal Credit Union. If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today!
We’ve been Coastal members for a few years have been happy with their services.
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Music Credit
Like the music in this episode?Our theme song is byGentle Regime. Additional music byLee Rosevere.
