As COVID-19 continues to shake the world, many people are reconsidering their careers, their work-life balance, their safety, and their priorities, especially when it comes to their finances. A recent report. A YouGov survey by Zurich International Life Limited has revealed the top financial priorities for individuals in the wake of COVID-19 are: Savings, Life Insurance, Retirement and then Home/Auto loans. This surveys feels about right, as during a time of financial and personal crisis, we like to first secure our own castle and make sure it’s protected.

Image by Steve Buissinne from Pixabay

So, in the wake of this global pandemic, what are your financial priorities now, or what should they be? Let’s dive into these top areas a bit more to make sure you feel prepared to keep your finances secure.

Bolster your Savings

One of the biggest things on many people’s minds is our savings i.e. money in the bank. Coronavirus has shown us that the world can change dramatically overnight, and for many people, having savings can help us weather and survive this crisis. 40 million plus here in the US have been laid off and although many likely got severance and can get unemployment benefits, there’s still a big unknown of how long that money will last. If you find yourself in a tight spot without a lot of savings; do what you can. Pick up side hustles while you’re looking for more full-time employment and definitely watch your spending.

There are many of us who are working from home and still getting their full salary (huge praise). While working from home, we are saving on commutes, morning coffee, eating out for lunch and going out socially. Use this time and any extra money to work on building up your savings to a level you are more comfortable with. If you don’t have one, work on setting up an emergency fund. If going through this crisis hasn’t taught you the importance of it, I don’t know what will! After that consider keeping a higher reserve of cash – just in case!

While for many people, it will be tricky to think about saving money right now, it’s a good mindset to adopt of learning the importance of saving. If you’re not able to save now that’s ok – focus on getting by, but as things get better remember to build up your savings.

Review your Insurance

The second area that I know a lot of us are likely thinking about while protecting our castle is insurance. During a global health pandemic of course health insurance is critical and top of mind. After ensuring that you have that in place, it could be a good time to review your other insurance policies, to not only make sure you’re not paying too much but also to ensure that you’ve adequately covered. Going through a crisis definitely makes you want to take a second look at the safety nets under you. Do this for your health, life, home, renters, auto, valuable personal property and disability.

One area to double down on there is disability, just because I don’t think it’s something that crosses the mind of a young professional. While many young professionals already have insurance for their houses, cars, and health, what we may not be thinking about is insurance for our income. If you have an accident or suffer from an illness that stops you from working, could you still cover your everyday expenses? Your salary will stop, but your bills and expenses won’t.

It’s hard to assess and consider risk, and each of us need to do this individually, but disability insurance is something worth looking into. When looking for any kind of insurance, it is essential to shop around, look for the best deal, look for the right coverage for you and also read reviews on insurance companies and specific policies. I’d recommend first looking at what your employer offers, many medium to large companies will offer some policy as part of their benefits package. It could very well be enough, or you may choose to supplement it. My employer offers a good disability insurance policy so I just stick with that. One final thing to note is that if you do run into issues, don’t just take ‘no’ or ‘denied for an answer’. Some people have experienced issues with Colonial Life disability policy after and experienced delays and denials because of alleged pre-existing conditions and you can choose to get outside legal help depending on the severity of the situation.

Controlling Debt

The final area I think a lot of us are thinking about right now is controlling our debt levels. Debt when used correctly can be a powerful tool to improve your life but on the other hand when abused it can cripple you financially both today and for a long while. Debt is very common for young professionals, so don’t fret about the debt itself; just focus on making sure it’s in a controlled spot.

The first thing to do, especially during a crisis is make sure you have a good handle on paying the debt. When you don’t pay the balance due each month is when you can get into some trouble with extra interest (and that can add up fast), so work to ensure you can pay the balance when it comes due. Control expenses or bring in additional income (side hustles) to make that happen. If you do find yourself in a tight spot, work with your lenders. We’re all in this together and many lenders are extending some grace in terms of letting you skip a payment or defer for a short time period. Do you research!

The second thing around controlling debt is around the interest rate you’re paying. Interest rates have fallen quite a bit, and there’s a chance that you could get a lower interest rate than what you have now, which will save you money in the long-run. The most common example is refinancing a house. As housing loans are for so long and for typically a lot of money, lowering your interest rate can save you thousands of dollars over the course of the loan. Refinancing typically costs $1-$3K but assuming you’ll be in the house for another few years and you able to lower your interest rate by around 1% point, I think it’s worth looking into! You can also refinance student loans, credit card debt or car loans! Take advantage of lower interest rates!

Summary

We’re definitely in a tough spot as a world right now and there is a lot of anxiousness and concern and this naturally trickles down to how we view our finances. Focus on securing your own mask before helping others (N95 in this case) and then work strategically to ensure your finances remain in a good spot.

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