How to Carefully Spend Money During This Pandemic
By now, it is quite clear that the coronavirus known as COVID-19 is having a massive impact around the world, especially in China, Italy, and the United States. Many of the cases are concentrated in large cities, but the disease may soon penetrate rural areas as well. So, what does this mean for you? Not only should you practice some measure of social distancing and quarantine, but also make sure that your financial life is in good shape. Many employees are now required to stay in their residences to prevent COVID-19’s spread, and some workers are getting sick pay or compensation while others are not. The financial impact is uneven, to say the least, and perhaps you are mildly affected, or greatly affected, or somewhere in between. Let’s review some ways you can keep your finances and health in check during the coming weeks.
Healthcare During the Epidemic
The American healthcare system is a huge and well-supplied one, and around 40% of the entire world’s market for medical products belongs to the United States alone. Still, many healthcare providers are bearing the brunt of COVID-19’s spread, and hospitals and urgent care centers are right there on the front lines. Now is the time to review your healthcare insurance plans and those of your family, and make sure that everything is in order. This is especially true for any senior citizen (that might be you), who is especially vulnerable to COVID-19 and has expensive and extensive healthcare coverage.
It may not be a good idea to save some money by dumping your entire healthcare plan right now, but then again, try to stay honest about what you can and cannot afford, and don’t do anything dishonest. In 2017, the median loss for healthcare fraud offenses was $1.9 million and the healthcare system and insurance companies have their hands full already without Americans committing fraud on top of everything else.
What about more specific healthcare needs, such as dentistry? You shouldn’t rule out visits to the dentist entirely; instead, be cautious and smart about how you visit the dentist’s office. Neglecting your teeth or your children’s teeth and oral health is no way to deal with COVID-19; already, 20% of American children go without dental care, and that can lead to cavities and infections, among other issues. But social distancing is being practiced for a reason, so visiting the dentist in this context calls for some finesse. For routine dental visits, contact your dentist and make sure that your appointments are still set, and if they must be rescheduled, stay on top of that. And when it is time to visit, make sure you arrive precisely on time, rather than linger in the waiting room. Minimize the time that you spend in the dentist’s office, and the risks of COVID-19 should also be low.
Child Care
It is one thing for young adults who live apart from their parents to be alone during the COVID-19 outbreak, but what about children with few or no parents to look after them? Statistics say that 1.5 million American children live with just one parent after losing the other, and two million children under age 18 have lost both parents. It is likely that your own children’s daycare centers, preschools, and K-12 schools are closed, and this means that you may save some money in that regard, but you must also be ready to keep your children occupied at home. This may prove tricky, but if you have a spouse or partner who can help, you may find a proper solution. You may find yourself juggling working from home and parenting, and if you are a single parent, this may prove a great burden.
There is no single, standard solution, but you can try some creative ideas that other parents are using, such as setting up video chat sessions for your kids so they can have screen time with their own friends and classmates. You might also lift house rules about screen use so you have time to work from home; now is not the time to worry about how much TV your kids are watching if it lets you handle your overflowing work email inbox. You might also negotiate with your bosses and managers and explain your challenging situation, and tell them that juggling work and child-raising is tough. So, you may end up having lower productivity and fewer work hours per week, but this may be the best you can do. The most flexible and understanding managers will most likely accept this.
General Financial Strategies
Whether you’re married with kids, a single parent, or a young adult living alone, you are going to face some changes to your financial life, most of them for the worse. But if you plan ahead, make preparations, and keep calm, you may be able to weather the worst of it and at least keep up with mortgage/rent and your other bills. You might even end up saving money.
Whether you’re earning $20,000 a year or $120,000, it is vital that you create and keep a spending log to track your expenses, bills, earnings, and savings. It’s possible to make six figures but fall behind and end up in debt, after all, while someone making $30,000 a year can consistently save. How? By writing down all the numbers and knowing what their financial limits are. Once you write down all expenses, bills, and purchases (big and small), you may be surprised to see how many small purchases add up, and how many of those expenses can be cut. Starbucks coffee is a go-to example of this, but don’t forget hair/nail salon care, movie tickets, event tickets, car accessories, video game downloads, and much more. Once your bad spending habits are diagnosed and laid bare, you can eliminate them.
What if you cut out Starbucks and movie tickets, but you’re still falling behind? This may be a fine time to sell a spare car or recreational motor vehicle, especially if your job is giving you reduced or no pay while you stay at home. Most likely, you should also refrain from any large purchases or investments such as a new condo, house, boat, car, or plastic surgery, even if you have good credit and an installment plan in mind. Such things are non-essential and should wait; you can always buy a boat after the COVID-19 pandemic is over. You wouldn’t want to buy an RV only for your employer to stop paying you due to policy change, after all. Be cautious with your money.
Other money-saving ideas include your mortgage, which you might be able to refinance if you negotiate correctly with all related parties. You can also slash various monthly payments, such as cable, satellite TV, video streaming services, magazine subscriptions, and the like. But don’t get too cheap about your car; if it starts performing oddly or needs care, get that maintenance work done. You don’t want the headache of a broken-down car on top of the COVID-19 pandemic. But if your car is an expensive one or a luxury car, it may be sapping you of money that you urgently need, so you may sell it and buy a much cheaper replacement.
Fortunately, cutting this far back on your spending does not have to result in a boring everyday life while waiting out COVID-19’s spread. In fact, this is a time to realize that many hobbies, pastimes, and activities are low cost or even free, and you can try them out (or get back into a hobby that you once abandoned). Many households include board games or decks of cards, or trading card games, and these can easily let your family pass an evening in high spirits without spending a dime. The same is true of watching educational documentaries (especially on DVDs you own – no video streaming costs), drawing and sketching, writing poetry or fiction/nonfiction, and jogging and hiking. Be sure to practice social distancing while in parks or on nature trails, though. You may also practice musical instruments, read books, and try meditation.
No one is enjoying the COVID-19 pandemic, and the national financial impact is going to be a big one. Still, if you negotiate with your employer and landlord, you may get them on your side to some extent, and you can cut back on spending while keeping your whole family entertained and in good spirits during this time. All this lean living, coupled with good hygiene such as social distancing and washing your hands, may give you all the tools you need to endure the pandemic.