7 strategies to reduce financial anxiety during uncertain times
Monday, 13 April 2020
We are living in stressful times. And while staying healthy is a top concern for most, many people are also deeply worried about the economy, their jobs and their own personal finances.
Everyone handles stress and anxiety differently, but there are some steps you can take to give yourself a greater sense of financial control during this very uncertain time.
1. Get organized
You can't make sound decisions about your money if you don't have a firm grasp on your financial situation. Now's a good time to gather up all your account statements and financial information and get it organized. Most online banking platforms provide digital tools that can help you get all your accounts, balances, payments and more in one easy-to-see place.
Once you do this, you can get a clear picture of how much money you have coming in each month, how much you're spending, how much you owe and the sum of your monthly payments. If you need to make decisions in the future about where to allocate your money, such as what payments you must make and which ones can wait, having your financial information organized will be very helpful.
2. Reduce unnecessary spending
Taking a good look at your spending habits will more than likely highlight some places where you can cut back. Whether it's online shopping, ordering from restaurants or unused monthly subscription services, reducing spending now isn't just smart, it can give you a greater sense of control over your money. Creating a budget is always a good idea and can help improve money management, too. Digital tools in most online banking platforms can help you create a budget and track spending.
3. Explore credit options
Do you have equity built up in your home? Or maybe you already have a home equity line of credit you're not using? Borrowing money right now might seem a little scary, but rates are low and understanding your available credit resources can be helpful.
4. Don't panic about your retirement savings
Chances are your 401(k) has taken a hit lately. You're not alone. But unless you're retiring in the next five to 10 years, you still have time to recover and continue to build your retirement savings. The current situation is very uncertain, but it is also temporary.
It's never ideal to tap into your retirement savings, but if you find yourself in need of funds, the recently passed Coronavirus Aid, Relief and Economic Security Act (CARES) increases the maximum amount you can borrow from your retirement savings penalty- free from $50,000 to $100,000.
5. Research assistance programs
If you are concerned you might be furloughed, have your hours reduced or be laid off, it's best to be prepared. Start researching assistance programs so you'll know how to apply if the need arises. The recently passed Coronavirus Aid, Relief and Economic Security Act (CARES) contains substantial increases in unemployment benefits for many U.S. workers. Take some time to find out what you might be eligible for, what the application process is and how long it might take for you to start receiving benefits.
6. Connect with your creditors
Most of the country is being affected by this pandemic, and creditors are well aware many of their customers might face economic challenges in the near future. Many are offering special programs designed to help people make it through this time. Find out what your specific creditors are offering. If you can't find any information about relief programs, contact the companies directly and ask. Even during normal times, creditors are often willing to make special arrangements to help customers through difficult times.
A word to the wise: If you can make your payments, it's smart to do so. Regardless of what type of debt it is, you could find yourself facing additional interest or fees if you don't make your payments on time. Keeping all your accounts as up to date as possible is highly advisable.
7. Write or update your will
It's also smart to have your important papers up to date and easily accessible during times of uncertainty. If you don't have a will, consider drafting one. At the same time, complete a living will, also known as an advanced healthcare directive. Doing this will ensure your wishes are clear if isolation prevents you from sharing them.
The content provided is for informational purposes only. Neither BBVA USA, nor any of its affiliates, is providing legal, tax, or investment advice. You should consult your legal, tax, or financial consultant about your personal situation. Opinions expressed are those of the author(s) and do not necessarily represent the opinions of BBVA USA or any of its affiliates.
Links to third party sites are provided for your convenience and do not constitute an endorsement. BBVA USA does not provide, is not responsible for, and does not guarantee the products, services or overall content available at third party sites. These sites may not have the same privacy, security or accessibility standards.
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