As a nation and global citizens, we are currently facing modern times. The outbreak of COVID-19 is a worldwide pandemic that has pushed several states and cities into a complete lockdown. Businesses have either come to a standstill or are trying to manage operation through widespread digital mediums while maintaining proper social distancing.
Preferably of following business and financial goals, the emphasis has now shifted on maintaining proper health and using caution to contain the spread of the Novel Coronavirus. However, in these times of crisis, it becomes more powerful than ever to take care of one's financial health. During these financially challenging times, specific money management guidelines have gone out the window. Here are some standard personal finance rules; it's OK to break during the pandemic.
Always Pay Your Bills On Time
Paying bills late or avoiding them altogether will damage your credit, but there are opportunities for those who don't have sufficient money to make ends meet. If you're in a dire situation, delaying payments is not just acceptable; it's expedient, and companies are willing to help.
Maximize Retirement Contributions
Recognizing that 43% of U.S. workers expect outliving their retirement savings due to lack of proper financial planning, as reported by the 2018 Planning and Progress Study from Northwestern Mutual, maximizing retirement participation is essential for creating a comfortable life down the road. However, this money can be used more carefully during a pandemic. However, with such various people are missing their jobs, Saul-Sehy says this is one rule it's OK to break into the pandemic. He prefers reducing or completely stopping retirement contributions and applying that money to build up a crisis fund faster. This emergency fund will help you get through a tough economic time, so you don't have to touch long-term investments and jeopardize your ultimate financial health.
Keep Your Credit Utilization Low
Your credit utilization rate applies to the amount of debt you are using compared to the amount of accessible credit you have, and lenders use this figure to decide how likely you are to repay a loan. To have a good to excellent score, which is vital to qualifying for loans with the best terms and lowest interest rates, it is advised to keep your credit utilization rate 30% or less. Regrettably, many families whose income has been interrupted are placing on credit cards to make ends satisfy and ballooning their credit utilization rate. The good news is your credit score can be made.
Pay Double or Triple the Minimum Due on Your Credit Card
Paying just the least due on your credit card bill typically only covers monthly credit charges rather than going toward the original principal debt. Therefore, it's necessary to pay at least double to triple the minimum due to pay down the balance and save on interest. For many debt-laden consumers, though, rising debt payments isn't an alternative at the moment. Alternatively, request a postponement on your credit card bill, look for a new credit card, and transfer the balance. You can find several credit cards offering 0% interest on balance transfers for a promotional period of anywhere from 12 to 21. Some may even come with a cash sign-up bonus that you can apply as a statement credit when you spend a certain amount within the first few months of the account opening. This will get you more time to keep fees low without racking up credit fees.
Pay Off Student Loans Quickly
Total student loan debt has given $1.64 trillion in the U.S., and such debt loads do it hard for young adults to get ahead. For this reason, it's recommended to stick with a bare-bones budget and put as much income via paying down student loan debt as fast as feasible. Happily, there are exceptional circumstances that make it OK to break this rule without costing you more. Keep in mind that the interest freeze does not apply to private student loans, so you will need to request a postponement with your specific lender and inquire about how interest will be used during this postponement period.
Shop With Cash to Avoid Impulse Purchases
According to a 2018 credit card spending study from Value Penguin, people are willing to spend as much as 83% more on a purchase when paying with a credit card instead of cash. Therefore, cash is the chosen payment method to avoid going into debt and spending behind your medians. However, when there is the fear of spreading germs among dollar bills and fewer people shopping in stores, plastic and digital payment methods are acceptable and advised.
Final Word
These are Personal Finance Rules to Break During COVID 19 Pandemic is OK! the most important is staying safe and staying happy, so stay home, stay safe!
