This Coronavirus lockdown has us almost numb to the numbers coming out. The biggest stock market point plunge in history, 6 million of us unemployed…and beaches still closed. I know that’s not a number, but it still stings.
Yet the economy is still going. It’s just different, changed. And probably forever changed.
And with change comes opportunity. Whole industries will be transformed. Some will disappear and new industries will be born of this. I cannot wait to see what this economic world looks like three or five years from now.
But first, we must get through this and get people back to work. So, let’s talk about a few ways to help get through this time better for it.
Do a Budget
Who needs a budget when we have so little to spend money on right now? Well, all of us do. And a budget is not the constraining and constant ‘no’ to spending that so many think.
No, a budget done right is permission to spend on things that are really important to us. To enjoy life in spending that really matters to us, in ways that bring joy. So a budget done right allows us to focus money on the things that really matter to us, and consciously exclude the things that don’t.
And one thing that should be part of the important things is to build up money for later, money that pays you in dividends every month. And a simple way to start small and get that done is with my favorite new tool, Acorns. Okay, it’s new to me, because I just discovered it.
You set it up once, which takes all of 3 minutes, and then every time you buy something using your debit card, it rounds up to the nearest dollar and deposits the difference into your Acorns account.
Remember when we used to use cash, and at the end of the day take all the change we accumulated throughout the day into a jar on our dresser? Well, same thing. Except instead of a jar of change, you can actually be investing and growing that spare change. Simple and painless. And I find that simple gets done. Take a few minutes and sign up today.
Build an Emergency Fund
Right. How about I kick you while you’re down. For those out of work who came into this without extra funds…how are you expected to build one up now?
Well, simple. We have more time on our hands that we did before. So, how about selling things? We all have extra stuff around the house that we can get rid of. Or I really like the Flipping Challenge that Gary Vee put out a few years ago. Still valid today. Basically Gary challenged his fans to build up wealth by buying great items at thrift stores or garage sales (okay, this one may not work at the moment) or on Craigslist or Letgo, and resell it for a profit.
It works. And it does take a bit of work, but can be fun, especially as your first profitable sales come in. And before you dismiss the idea thinking ‘great, I can make an extra $24 bucks. Big deal.’ If you do that over and over, it can add up quickly to an extra $100 or $500 or $1000 every month. There. Emergency Fund.
Don’t want to resell stuff online? How about joining the growing fleet of grocery delivery drivers? Lot’s of ways to gather an emergency fund, even in these odd times.
An odd thing to do when nearly all our normal spending is cut. Well, except for groceries and alcohol, those are through the roof.
But nearly everyone can cut their mortgage payment by refinancing. Mortgage rates are just that good. A couple days ago I helped a past client set up a refinance to a 15 year fixed rate, from his current 20 year loan. The payment increased $30 a month. But he will save $85K in interest over the next 15 years until it is paid off. Another way to save.
Let’s explore options for a refinance for you. This weekend I went back and forth with a homeowner on Facebook Messenger. She was asking, wondering really, if it would make sense to look at refinancing her 4.5% mortgage. After a lot of questions, she filled out the loan application so I could run numbers. Yes, she will save $420 per month by refinancing. That’s $5,000 a year. A nice raise during these times when few are getting raises, even if they have jobs.
But it’s not just the mortgage. Think negotiating a lower rate on the credit card o shopping the cell phone plan. Even homeowner’s insurance. With one couple I am helping with a refinance, I took note that their homeowner’s insurance is $391 a month. Pretty hefty for the home size and part of town. I encouraged them to shop it and made a suggestion of a good insurance agent. Very similar coverage is now just $183 per month.
Do you still have cable TV? Well, all that cable news is probably not doing much for your state of mind. And, so many are cutting the cord, it is worth looking at options. We got rid of the Dish a few years ago, and got a Leaf indoor antenna so we could receive the local channels. Mostly to be able to watch football and golf. The reception was not the greatest where we live, so we went halfway back and subscribe to Youtube TV. It’s $50 a month, and has all the channels we could wish for. Between that, Netflix and Amazon Prime, we have all the programming we could with for…and still cannot find anything to watch most evenings.
Learn a New Skill
I said in the introduction to this article “with change comes opportunity”. And why not you, gentle reader, to help lead that change and create opportunity? I have always found that learning a new skill, while uncomfortable, expands the mind, expands our horizon. And that helps get creative and think just a little outside our normal limits.
Esoteric. Perhaps. But true just the same. I know you have experienced a revelation as you learned something new. Just think back to our common experience of learning to ride a bike. We were frightened, wobbly, and had scraped knees. But we kept at it, and soon discovered a whole new world of speed and freedom. The horizon of our experience expanded.
It’s no different now as we learn. It’s all wobbly at first. But eventually, it will, again, open up a whole new world of speed and freedom.
I would love to know what you are learning. Myself? Two things – refining internet marketing, and the world of stock options trading. Both are exhilarating!
Right, with the gyms closed, that’s not so simple. I realize. And this may not seem like a financial move. But it so helps to clear the mind and think better, that it is just as important as the 5 recommendations above.
And I’m not the gym rat that many of you are, anyway. But we are enjoying long walks around the neighborhood every afternoon. And stretching. Not going for Mr. Olympia here, but getting out and working out, whatever your flavor, clears the mind and gets ideas flowing again.
Plus, we just work off the quarantine ice cream. Remember, we will be back to the beach again, someday.