With all the uncertainty of COVID-19, you may feel like you don’t have control over your finances. Keeping up with the news as the stock market dives and unemployment figures rise is certainly tempting, but it won’t go very far in making you feel better. That’s why organizing your finances may be the key to putting yourself back in the driver’s seat.
“It is easy to feel afraid and powerless in a time like this, so money moves that help put you in control will reduce your financial stress and help you function better,” says Kelley Holland, CFA, a financial stress coach with her firm Own Your Destiny.
We spoke to three financial experts and asked for their advice on how to take inventory of your finances in 10-minute increments.
Take a fine-toothed comb to your credit statements
If you’re quarantining at home, then you may find that your expenses have been lower in the past month from not going out so much. Therefore, it’s the perfect time to go through your credit statements and figure out what you can cut going forward.
“Glance over your recent spending to see how you feel about it,” Jackie Beck, an expert on debt management, advises. “If there are things you don’t value, you can cut those out going forward.”
Memberships and subscriptions add up — and you may find that you don’t watch Hulu anymore or that you don’t need a monthly shipment of Fabletics yoga pants like you used to. Cut them from your budget. “Over time, tiny changes like these will make a huge difference,” Beck says.
Cut a better deal on your monthly bills
Negotiation is an art. If you’ve discovered that your phone plan isn’t suiting you anymore or that prices have been unexpectedly raised on your internet, then now is the time to contact the company and get a better agreement.
Holland suggests calling them to change your service package or get a better rate. “This is a very good time to ask companies to do better by you because they really don’t want to lose customers right now. Even in this stressful, chaotic time, you have more power than you think.”
If your cellphone bill has gotten high, Beck recommends looking into a prepaid plan, which can often bring down your monthly costs while providing the same level of service. Depending on your phone usage, the savings might be worth it.
Unsubscribe from marketing emails
Ah, the joy — and scourge — of sales. For deal hawks, marketing emails are a boon for saving money, but for the regular shopper, they may be a perpetual source of angst and impulse shopping. If you fall into the latter category, it’s okay to opt out. Hit the “unsubscribe” button and don’t look back. Beck brings up a great point here: “There will always be deals, but getting rid of temptation is the real savings!”
Switch to a better account
You don’t have to settle for less if your APY or credit card rewards rate aren’t fitting your lifestyle. It only takes a few minutes to switch. Holland says, “You can apply for a credit card that offers more cash back than the one you are using, or open an online savings account paying more interest than you currently earn.” Don’t forget to change your bill autopays and direct deposits.
Diversify your portfolio
It may seem weird to be tinkering with your retirement accounts when the stock market is down, but reconsidering your fund allocation may help to mitigate big losses. Michele Cagan, CPA, says, “Take a look at the holdings inside and outside of your retirement plans to make sure there’s not a lot of duplication. There’s no point having the exact same funds in all of your investment accounts.”
Instead of looking at your investment accounts (such as your 401(k), Roth IRA and traditional brokerage account) as separate entities, it helps to look at the big picture. “If you look at it all together, and make sure you’re overall diversified — instead of being diversified only inside each account — you’ll fare better during downturns without reducing upside potential,” Cagan says.