GOBankingRates: Essential Money Tips for Surviving the ‘Pandemic Spiral’
Dylan Telerski / 6 Oct 2020
When it comes to making money decisions during this time of crisis, “going with your gut” may not serve you in the long run.
Ubiquity Founder + CEO Chad Parks shares insight that may go against your instincts but can help create a foundation of financial stability during these uncertain times.
Prioritize Emergency Savings
In times of uncertainty and upheaval, “people crave a return to familiar, predictable rhythms,”
– Monica Schoch-Spana, a medical anthropologist at the Johns Hopkins Center for Health Security to The Atlantic.
It’s easy to fall into a “normality trap” when dealing with a crisis. It’s basic instinct to want to return back to “normal” ASAP rather than facing the uncertain world we are now in. When thinking about your financial life, this may mean you’re maintaining your normal spending (or lack of saving) behaviors, if you’re not one of the millions of people who have lost their jobs due to COVID-19.
The pandemic has illuminated how quickly financial stressors can strike–and with minimal warning. An emergency fund, ideally made up of 6 months of expenses, is a crucial part of your savings.
Keep Contributing To Your 401(k) Plan
While it’s important to build and maintain emergency savings, this doesn’t mean you should stop contributing to your retirement funds (as long as you can still afford to). If your employer has temporarily stopped matching contributions, your instinct might be to stop contributing — but this isn’t necessarily the right call.
If your company has suspended their 401(k) match, it’s likely so they don’t have to make more drastic cuts. In the words of our Founder and CEO at Ubiquity Chad Parks,
“Reduction in a long-term benefit is worth the short-term trade-off. For individuals, this loss of a company match should not modify your savings strategy. It will not make or break your retirement. Even if your employer is not offering a match, if you are saving in your 401(k), you are gaining a government match. Those tax dollars are going out the door one way or another. By saving in your 401(k), you are diverting those tax dollars from the government to your retirement savings”
Other tips include:
Cut Costs Where You Can
Put Your Savings Into a High-Yield Savings Account
Diversify Your Income
Keep Investing If You Can Afford It