Remember last week when we said we weren't worried about the market? Well that part is still true, but all the negative news around coronavirus is starting to get to us. We want to channel this anxiety into something more productive! More on mental wellbeing at the bottom, but first things first, what to do right now to be proactive with your money.
The stock market has experienced some extreme volatility due to the effects and uncertainty surrounding coronavirus. The S&P 500 had its biggest one-day gain on Friday since 2008, while the Dow hit its lowest level on Monday morning since April 19, 2017. While we can’t predict what will happen next, we can recommend 4 smart money moves to make the most of this time of social distancing and to help you feel more calm and confident about your money.
1. Boost your emergency fund.
Now is the time for your emergency fund to shine! One of the best things you can do for yourself both mentally and fiscally is to make sure you have 3 to 6 months of living expenses set aside. Your emergency fund is great for stocking up on groceries and medical supplies or paying for other unexpected costs like extra travel fees, buying that ergonomic office chair for your work from home sitch, or even that 5000 piece puzzle you’ve been eyeing, you ambitious social distancer you. High five to everyone who already has an emergency fund! For those of you who haven’t gotten around to starting one yet, high five to you too because now is the perfect time! You can learn more about how to start your emergency fund here.
2. Refinance your loans.
On Sunday, the Federal Reserve announced that it would drop interest rates to zero. This means that now is a great time to refinance your loans and get a lower rate on your debt. So if you have a mortgage or student loans, definitely take some time and look at your options! Side note, the downside to low interest rates is that the money you have in your savings account is earning you even less, womp womp.
3. Take some time to practice financial self-care. Organize your finances.
This is the perfect social distancing activity if you ask us. Knowing what you have and what it’s invested in is so crucial to your financial wellbeing. Here are 4 types of accounts you should have and what to look for.
4. Try not to obsessively check your investment balances.
It might be satisfying your masochistic side, but watching your investment balances fall as the market plummets is probably not great for your mental wellbeing. Think long-term. The stock market might drop 3% one year, it might gain 5% another year, or it might even gain 29% in another year (like in 2019!). Historically, the market on average has returned 10% annually. If your investment portfolio has taken these risks and your personal goals into account, this is just part of that journey. These down times may also be a good time to buy depending on your personal situation. You know what they say, “buy low, sell high!” Let’s stay positive during these tough times!
Money is a huge stressor for us all, especially amplified during these unpredictable times. Everything just feels heavier right now. Make sure you’re taking time to practice self-care, whatever that means for you, whether it’s working out in the living room, taking some time to journal and reflect, or making time for a 5 minute meditation to calm your mind. Take a deep breath, we’ll get through this together. If you’re still feeling nervous about your investments, come talk to us! We’re here for you. You can schedule a call here. With all our evenings spent social distancing, we now have a ton of free time. Seriously, hit us up.
