Posted by Taxes Made EZ Inc

Best Smart Money Moves in the COVID Economy

Best Smart Money Moves in the COVID Economy

Economic crises are not the only problem stimulated by the current COVID-19 pandemic, it also greatly affect the health-related issues. Because of unemployment, the following weeks or months bill cause millions of Americans to be worried and wondering about how to settle these bills. Living through in a situation like this is scary and protecting oneself financially is the best option we can have. The following are some moves we can make to be financially protected.

Boosting Emergency fund

It is essential to have emergency savings all the time. Thus, it is even more crucial to have it during this time when the economic instability burst and unemployment are widespread. An emergency fund is said to be solid if it has sufficient fund to sustain 3 to 6 months of basic living expenses, with our current situation, maximizing it would be great. For those who still have work, most particularly those who do not have 3 months of expenses in the bank, utilizing your paycheck to fill out your savings is a must.

Leave your stock portfolio alone

In recent days, the stock market is fluctuating, and in order to prevent future loss, the idea of cashing out investment is inciting, thus it will only enfold losses in you are considering right now. Instead of going that way, keep in mind that if you loosen up and allow the situation to continue instead of dealing it immediately, sooner or later the stock market can potentially recover over time. At the same time, if your purpose is to acquire more stocks, you do not have to let go of your stock portfolio. Nowadays is most companies’ stock is on sale and investing in a good one is very timely, consequently, if you certainly know how to save up for emergency funds beforehand, you can utilize your extra money to increase or branch out your portfolio. 

Keep putting money away for retirement

The moment the possibility of unemployment emerges over you, the status of your finances for the next 20, 30, or 40 years will be of your concern. To the same extent as currently is the right time for increasing your stock portfolio, also now is the right time to continue putting funds of your 401(k) or IRA, given that you are still capable of doing do. The invested money in that account today can be used to earn discounted investments that can increase exponentially through the years.

Apply for a home equity line of credit

In spite of the fact that you are still working as of the moment, we never can tell if the current pandemic crises we are facing might pull us out of a job. Moreover, if in case right now you are unemployed, getting a payslip again would be able to take some considerable period of time. For this reason, having the capacity to obtain fund is essential, that is why if you own a home but have your emergency savings bad, applying for a home equity line of credit could pay for it. By doing so, the money you borrow will not instantly gain interest, as it would happen like this with a home equity loan. Instead, you will have a choice to lend the amount you needed.

File your taxes sooner rather than later

The 2019 tax season filing deadline was extended until July 15, 2020, however, it is recommended to submit your return as early as possible if you owed a refund. In this way, the IRS can process it early for you to get back your money. In addition, if in case your adjusted gross income in 2019 is lesser than in 2018 since the higher earnings can make you ineligible,  it could mean either obtaining a full recovery payment in the next weeks or having reduced payment or complete removal.

Smart use of credit cards when cash is low

Using a credit card on essential purchases is fine if your emergency cash fund does not have sufficient money to pay for expenses. But make sure that each month you will pay the minimum due. To be able to stay current in the time of crises you must pay the minimum due, it is also a way of maintaining a good relationship with your card issuer.

Right now, the majority of Americans are striving physically, emotionally, and financially. Though the first two might difficult to address, you can decrease some money-related concerns you might have at the very least by making smart decisions that will benefit you in longer term.

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