10 Smart Money Moves to be Financially Productive from Quarantine
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Today, we’re all trying to look on the bright side. This coronavirus isolation thing sucks, but it’s not all bad.
At a time like this, no one should ignore ways to recoup a bit of cash. So we asked experts: What financial chores can we knock out during the coronavirus quarantine?
Lacey Cobb, a CFP and director at Personal Capital, and Joy Liu, a level-two trainer at the Financial Gym, helped us create the ultimate to-do list. Let’s jump in.
1.) Check your emergency fund
Layoffs are already starting in some industries, and medical costs are extra scary right now, so having an emergency fund in place is super important. Cobb told us we can save however much we want, but a good guideline is three to six months’ worth of expenses. If you don’t have that money to put away now, your first goal should be to devise a plan on how to do so immediately.
2.) Review your spending
Download your credit card transaction history and gather bank statements from the past three months. Then, take a hard look at them, identify needs, wants and wasteful spending decisions.
“No judgment or anything — it’s just observing the behavior,” Liu says.
From there, you should decide whether there are any habits you should change, subscriptions you should cancel, et cetera.
If you don’t have it yet, check out Personal Capital >>
3.) Go shopping (around) for car insurance
For fixed bills like car insurance, Liu said it’s a good idea to shop around and/or ask for new quotes from your provider every once in a while because they tend to change rapidly.
Enter Zip Code, Get Quote and Calculate Your Savings >>
4.) Set up a high-yield savings account
The rates offered by online banks won’t be quite as high as they once were due to recent Fed activity, but this is still a great time to create a high-yield savings account if you haven’t already. Money likes Barclays (1.60% APY) for high-yield savings accounts and Ally (1.5% APY) for an online bank, so those are probably good places to start.
Barclays is still offering rates far above the national average here >>
5.) Optimize credit card debt & lower your interest rate
This is a golden opportunity to analyze any high-interest consumer debt you have. You should move it to a 0% interest credit card or consolidate it with a personal loan if you have a good credit score (680 or above). If your score is lower than that, Liu advised to call your card company and negotiate a rate reduction.
“Given the current climate, they’re going to be more likely to do that [than normal], especially with interest rates dropping and the pandemic happening,” she says.
There is no harm to apply for a personal loan – rates updated daily here >>
(Asks for your SSN – does not harm your credit & site is secure.)
6.) Dive into your credit report with help from a person
Americans are entitled to a free credit report every 12 months from each of the three main credit bureaus. In the interest of not blowing them all at once, Liu recommends you only pull one using annualcreditreport.com. Once you’ve got it, what if you find any fraudulent activity or mistakes?
Credit Squad offers free credit consultations from real people (working from home)
Call them and let someone explain your credit report without the jargon.
7.) Do your taxes
It’s easy to forget when you’re watching CNN and worrying 24/7, but you’re still on the hook for income taxes. The IRS pushed Tax Day back to July 15, but your state deadline could vary.
“It would make sense to file sooner rather than later if you're going to be getting a refund,” Cobb says.
8.) Consider the afterlife (life insurance)
Cobb told us to get everyone in the family on the same page about money, whereas Liu said to organize your documents and put together a will, power of attorney and health care proxy. At the very least, you should review your beneficiaries on your retirement accounts to make sure they’re up-to-date. After all is said and done, you should also consider life insurance, to make sure you’re loved ones are protected if the unexpected happens.
“The world feels pretty chaotic right now, and it’s human nature that we feel better by doing something,” Cobb concludes. “It gives us a sense of control.”
We asked 12 life insurance companies about coverage during the Coronavirus Crisis. Here is what they said >>
9.) Rethink your investment strategy
With the market being up and down these days, it’s easy to panic and sell, or if you’re new to the game, to not invest at all. Robinhood has become one of the largest stock trading apps in the country, offering commission-free trading and an easy way to start investing. They offer you the ability to start with as little as $1 and buy fractional shares.
Create a Robinhood Account. After this month’s adjustment in stock prices, it might be a good time to start trading.
10.) If you haven’t refinanced your mortgage yet, waiting could have paid off!
If there is one word on the mind of every homeowner and financial planner right now, it’s this one: “Refinance”.
Mortgage interest rates are near historic lows but Rex Salisbury, an Andreessen Horowitz’s partner, reported that “some lenders have actually raised rates, as demand exceeds [banks] ability to process applications.’
That surge in demand is subsiding, so if you waited until now it might mean you could get a better rate today than even last week.
If you’re looking for a company to provide some extra help with the refi process, Money recommends AmeriSave for their great customer service.