Personal Finance in the COVID-19 Era

By Hipster Finance | Hipster Finance | 8 Apr 2020


This moment has changed all of us.  It’s changed our daily lives and routines.  Changed where we go and who we interact with.  Even HOW we interact.

So it’s no surprise it’s changing the way we deal with our money.

 

Spend Less?

 

With a MASSIVE 6.6 million filing for jobless claims last week (source: Washington Post, https://www.washingtonpost.com/business/2020/04/03/understanding-march-job-report/) the US, as a whole, are going to need to spend less.  

This is no easy task for this country.  But nearly all essential business in the majority of states is shut down.  In fact, nearly 95% of Americans are under stay at home Lock-down mandates (source: Business Insider ,https://www.businessinsider.com/us-map-stay-at-home-orders-lockdowns-2020-3).  

Because of this, many are finding that we automatically spend less money.  Not that we’re really working for it, but just that it’s harder to actually spend.  Many often spend a large portion of their budgets on eating out (I know I do) and that really isn’t an option. 

Entertainment is another large expense for many.  But with bars, movie theaters, clubs, bowling alleys, etc. all closed, that likely won’t be the case this month either.

To spend more than you were pre-COVID-19, you have to work at it.  Like actively seek out places to spend.  The majority of business is limited to grocery stores, mixed chains like Wal-Mart/Target, and online retailers.  

A nation of normally consumers, has suddenly been halted from consuming.

Due to all the uncertainly, one of the biggest keys right now is cutting back spending on everything possible.  Limit purchases to needs only and research any relief programs if needed.

 

Make Less?

 

The other metric impacted besides consumer spending, is consumer earning.

With so many American’s filing for unemployment, and many others taking salary reductions while working remote, people simply have less coming in every month.  

What's worse, many in high risk groups prone to serious reaction to the virus are afraid to go out and find new employment.  And understandably.

A lack of spending, and a lack of earning, leaves the economy sitting in a giant confused question mark.  The recent passing of the stimulus bill brought some signs of relief, but didn’t do much in curing uncertainty.  So the market continues to bounce up and down, for now.

 

Leave Emotions Out of It

 

One thing is for certain.  Emotions (namely panic and anxiety) are at an all time high.  No one knows whether this thing is here to stay, or going to be cured tomorrow.  But nearly all signs seem to point to lingering impact.  

If I had one word of advice, it would be to stay calm through this.  Easier said than done, but emotions have little place in personal finance.  Many bad decisions in budgeting and investing were taken from places of high emotion. This is a great time to put together your budget and net worth. Rely on your data to find an unbiased plan.  And then, stick to it.

Our only option is to focus on forward as a country.  We will get through this together.

And hopefully, after April’s orders are lifted, this will just be one big traumatic event that we can all learn a few money lessons from.

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Hipster Finance
Hipster Finance

9-5er building freedom, one dollar at a time. Making money hip, and sharing knowledge along the way. BUDGETING | INVESTING | MINDSET Find me on Twitter and Instagram!


Hipster Finance
Hipster Finance

Sharing my thoughts on budgeting, investing, and mindset.

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