By Vera Wilson
These are surreal times. With cities worldwide looking like ghost towns and shortages of basics like toilet paper and canned goods, it feels like we’re preparing for a hurricane that could last for months, not hours.
With emotions running high and panic setting in, it’s easy to make the wrong decisions regarding your finances, so here’s some advice from the experts on how to handle your money during this critical time.
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Q. My wife is in hourly employee who has been sent home for four weeks; our household can’t afford to lose that money! What should we do?
A. This is exactly why you have your emergency fund or savings. If you don’t have one, have your wife reach out to her state’s Department of Labor to see if and when she can apply for unemployment. (Warning to freelancers and many nonprofit employees: You are likely ineligible.)
Reach out to companies you owe money to — they may work with you to set up a payment plan. Many credit card companies are waving interest and penalties for late payment. Some utility and telecommunication companies have halted service disconnections for nonpayment. Financial relief from the federal government is being seriously discussed; most payments to the IRS have already been deferred.
Q. The stock market is tanking. Should I sell?
A. The stock market roller coaster has many of us afraid to look at our investment accounts, but if you’ve appropriately and consistently balanced your portfolio, there’s really no reason to torture yourself now. Just stay the course with your long-term investment plan and remember the age-old mantra: buy low, sell high.
Selling low now may make you feel safer in the short-term, but will probably do nothing more than make you miss out on the ensuing rally, which history tells us will happen. If you’re set up with automatic investing schedule, resist the urge to stop it.
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Q. If a market rally is coming, should I buy now?
A. A friend in the business says many of her wealthy clients are poised to buy. Two things to remember: Don’t invest money you can’t afford to lose, and we don’t know when we’ll see rock bottom, so you may buy and see your investment go down before any rally kicks in.
Q. Should I refinance now that mortgage rates are near zero?
A. As always, this depends on your personal situation (such as how long you plan on being in the house), but it’s certainly a great time to consider it. Refinancing may free up cash that you’ll need down the line.
Ultimately, you need to make financial decisions that you feel will be in the best interest of you and your loved ones during these difficult times.
Vera Wilson is freelance writer based in North Carolina. She frequently writes on financial topics.
