I remember when the news broke back in January about the Coronavirus Disease 2019 (COVID-19) and how rapidly it was spreading. I was on maternity leave, at the time, but the thought of going back to work and leaving my sweet baby was more real than the thought of COVID-19 spreading in the US. But life continued as normal and, as expected, I returned to work and jumped right into my new routine. Fast forward one month and the COVID-19 threat was on American soil spreading quickly and claiming many lives.
The US Government began issuing mandatory stay-at-home orders for non-essential businesses and personnel. I never imagined that the world would be put on pause during my lifetime. We witnessed within one week of shutdowns, small businesses going “belly up” and businesses in the tourism industry struggling to keep their doors open.
But the government did sort of help right? Economic Impact Payments were provided to eligible taxpayers who filed tax returns for either 2019 or 2018 of payments up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child. Some help is better than no help, but there was a lesson here if you missed it. Nobody will work harder for you than you. So as much as a second Economic Impact Payment would be nice, if we don’t get it, will you be able to cover your household expenses?
Experts are calling for a second wave of the virus. Since I’m not an infectious disease specialist I have no clue if it will or won’t happen. But what I do know is we’ve got to get prepared. If we’ve learned anything from this experience is that pandemics are not respectors of ethnicity, race, creed, age, or social status. So before you put one more expense on that credit card that you don’t have cash to cover or take out another personal or auto loan, ask yourself these three questions:
- Do you have a $1,000 Emergency Fund?
Don’t get me wrong, $1,000 won’t go very far. Especially during a pandemic where your reality of being laid off for months is likely. However, $1,000 saved can cover a small emergency and you’d be ahead of 59% of Americans who don’t have it saved. Think of this as the “you’re on the way” step. But being financially fit is a journey so don’t throw in the towel just yet.
- Do you have a Fully Funded Emergency Fund?
A good financial tip is to have a three-to-five month emergency fund. Based on past experiences that number is higher for us, but the moral of the story is to be very prepared. Nothing about 2020 has been “normal.” In fact, 2020 has created a “new normal.”. So are you going to step into the new you? This is the time to challenge the old ideology that says wealth is reflected in what and how much you consume. Although it may be difficult, focus on saving for rainy days and let’s face it, some days are rainer than others. Should you experience loss of income, can you adequately maintain?
- Are you Debt Free?
You’ve probably already heard of the differences between good debt, bad debt, and even debt weapons (a term I only recently heard). Regardless of the terms, debt is still debt and during a pandemic, or any other disaster that may be lurking in 2020, reducing the amount of money going out of your household is key. What if you lived life and had no debt? Could you imagine how freeing that would be!
If you can’t answer yes to all three questions then we have work to do. This pandemic has been a very stressful time for many, but what if your financial situation wasn’t a factor in the chaos? I wish I had a more mystifying or even a fancy answer to solve the world’s financial problems, but that’s not the case. Doing nothing has a cost. So whatever your personal views on debt remember money going out to pay debt is money that’s not working for you. If COVID-19 has taught us anything it’s that preparation is key and it reinforces that life is short. Enjoy more time with family and friends without the burden.
