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Facts, not Fear

Updated: Apr 30, 2020

What to do with your money during Covid 19
Covid 19 pandemic

What to do right now, and what to do when the worst is over.

The COVID 19 pandemic of 2020 will go down in history as one of the most significant negative worldwide events ever, mainly due to the universal effects it is having on everyone, regardless of whether the infection itself touches anyone close to them.

At this point in time the estimates are that total deaths in the U.S. may reach 100,000 or more, which would be double to triple the annual deaths from the seasonal flu. But the economic effects are enormous and all 330 million U.S. residents will be impacted to some extent.

So what can you do to protect your own finances, present and future, at a time like this?

First of all, remember that facts are your friends, and fear is your enemy. Facts help you make good decisions. Fear causes you to make bad decisions, every time. And the facts that should matter most to you are those that are true for YOU and your family, not national statistics. So evaluate YOUR particular financial situation, for example:

  • Have you lost income? Or is there a reasonable chance that you will?

  • Are you in debt at all?

  • Do you have savings and investments?

On the basis of those answers, you should be able to put yourself into one of these four categories:

  1. You’ve lost your job or your business has been shut down, and you have no income. Think waiters and waitresses, hairdressers, manufacturing jobs in nonessential industries, and the like.

  2. You’ve still got your income, but the nature of your job or business means that losing income is fairly likely. Jobs like real estate agents, or those in advertising. Just because you can work from home doesn’t mean that demand for your product or service will continue long term.

  3. You’ve still got your income, but the nature of your job or business is essential and your income will not drop, in fact it might even increase. You are running , or working in, a grocery store, health care, trucking or some other essential service.

  4. You’re doing fantastic, maybe you’re retired, or if you’re working there’s no fear of losing income, and you’ve got no debt and significant amounts in savings and investments.

So here’s what to do, and what to focus on, for each of those 4 categories:

1. You’ve lost your income

Suddenly you are in a storm, so go into storm mode.

That means that FIRST and FOREMOST you take care of what we call the FOUR WALLS: Food, shelter, utilities and transportation. Stop all other spending until you know that you have these four taken care of.

  • Food on the table (groceries, not eating out, even delivery) comes before anything. You must feed your family and nothing else matters if you aren’t doing that.

  • Then make your basic utility payments: lights, heat and water. That doesn’t include the cable bill or internet, not yet, anyway.

  • Then pay your rent or mortgage. Contact your landlord or mortgage lender to see if they have relaxed requirements in light of this crisis, if you can't make the payment.

  • And transportation...keep gas in the car, make the loan payment if necessary and keep it insured.

If you can do that much, nothing else matters. NOTHING.

If you have enough to make your minimum debt payments, you can, but it’s also OK to not pay your credit card at all until you know for sure that you’ll be getting some unemployment benefits or other money. If there’s any doubt, hang onto as much money as possible.

Likewise contact your creditors about your situation. You’ll get grace extended during a time like this when you wouldn’t during ordinary circumstances.

And then get out there and find another job! It doesn't have to be your dream job, it just has to put food on the table. Major essential retailers like Walmart and Amazon are not only hiring right now, they're increasing pay rates. Nothing is beneath you....just go apply and do whatever it takes!

If you are in such dire straits that you fear an eventual foreclosure or bankruptcy (keep in mind mortgage lenders are not starting foreclosures during these unusual times), and you are eyeing your retirement accounts, STOP!!! That is only a very last resort, and a decision that is too early to make based on current conditions. If you think you need to withdraw from retirement accounts, PLEASE call me! Let’s talk this through very thoroughly before you make a big mistake.

2. You haven’t lost income yet, but you probably will soon

In this case, you can see the storm clouds on the horizon. So batten down the hatches and prepare.

That means STOP paying anything extra on debt, if you were working a debt snowball, and pile up as much CASH as you possibly can. Eliminate ALL unnecessary spending. Take care of your 4 walls like the example above, and keep paying minimums on your debts, but no extra.

Save for a rainy day
Pile up cash

Use your detailed written budget to find as much extra as possible to put into your emergency fund.

In time, when the crisis passes, if you haven’t lost income or you regain your job or another job, you can resume your debt snowball using the savings you’ve accumulated over and above your basic $1000 emergency fund. The time lost for your snowball will be very minimal.

3. You won’t lose income, and you may even increase your income.

For starters, take a minute and thank God for your good fortune.

Then realize what a great opportunity you have to make even faster progress on your goals.

If you are working your debt snowball, don’t relax your budget...instead increase your extra payments on debt even more. In other words, make hay while the sun shines! The next crisis may not be of the type that benefits you like this one has.

But also, be ready to respond to those that God puts in your path who are less fortunate. A lot of people are hurting right now, so do what you can to help those in your circle of influence.

4. You’re in great shape and that’s not gonna change because of this crisis.

Well, first off, be darn sure it DOESN’T change!

In particular, don’t let fear cause you to do something stupid like sell out of the stocks or funds in your retirement accounts or other investments. That’s the worst possible thing you could do at a time like this, and it can completely undermine all those years of hard work and smart financial moves you made to get to where you are now.

Our economy was not only sound, but the best it’s been in many, many decades right up until this virus hit. And the pandemic restrictions WILL pass, perhaps sooner than anyone is willing to predict.

At most, it will be a few months of uncertainty but the chances are very good we’ll be close to record highs again this time next year. So don’t let short term fear derail your long term plans.

Remember the only people who get hurt by a roller coaster are those that jump off in the middle of the ride!

You won't get hurt if you don't jump off the roller coaster
Don't jump off the roller coaster

And secondly, be thankful for your good fortune and be generous like never before.

Don’t judge those who are suffering, even if you think their own choices helped put them into this pickle to begin with. Offer them a hand, with money or necessities, and also some help with things like a budget, to help them prevent further problems. Not everyone will accept, but that’s OK. You won’t know until you try. And you’ll help a lot of people in the process.

What to do when this crisis is over

Recognize the HUGE wake-up call we've all been given, and resolve to NEVER AGAIN be caught unprepared!

Were you scrambling for toilet paper week by week? I've been joking with my friends that I look like a genius now because for years I've bought TP online by the case, every year and a half or so, just to save money. So the empty shelves in the paper aisle don't bother me a bit.

Be prepared for a crisis.
Empty grocery shelves

I'm NOT telling you to become a hoarder, believe me! But I am saying there's a huge difference between hoarding and being prepared with basic supplies and a well-stocked pantry.


If you've been living paycheck to paycheck, with no plan and no clue, it's time to get both!

Learn how to do a proper written budget, live on less than you make, get out of debt, and then build yourself an emergency fund of 3 to 6 months of expenses.

A stay-at-home order with no job becomes a pretty relaxing vacation when you're debt free with money in the bank!

I specialize in helping people get organized, do a budget, and develop a plan to become debt free, build an emergency fund, and invest wisely. I might be able to help you even now, for free, so don't hesitate to schedule a complimentary consultation by going here:


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