Every day, news headlines are reporting updates from healthcare professionals and state governors are issuing strict stay-at-home orders across the country. In a time where people are frantically hoarding toilet paper and lines are forming outside of grocery stores, it may not seem possible to even consider a silver lining. The United States has acted quickly to implement several relief efforts that may benefit you and your family. Additionally, this time of extended quarantine may present new opportunities that can positively impact your financial position. Here are a few ideas to consider while you’re stuck at home:
· Refinance. The Fed was one of the first to respond to the coronavirus crisis by cutting interest rates to zero. This action may present an opportunity for you to refinance any high-interest debt you are carrying. As a rule of thumb, refinancing is worth considering if the market interest rate is at least 1% lower than your existing rate. If you think you’re a candidate, read through the terms of your current note and confirm what penalties (if any) you may incur by making a change. This could be a good move for your mortgage, car note, student loans or even transitioning double-digit consumer debt to a personal loan or balance transfer plan. Do your research and lean on your banking relationship to review options and make your decision with the proper guidance.
· Reduce your cashflow. With stay-at-home orders in place across the country, discretionary spending will likely be reduced by default. If you’re not in the habit of tracking your spending, now is a good time to do it! Use a couple of your Netflix hours to go through your bank statements and track where your money has been going. Where can you cut back during quarantine? Can you capture that savings as an additional deposit to your emergency fund or maybe even for your long-term savings goals? You should have a minimum of 3-6 months’ expenses set aside in cash, and anything outside could be invested for a potential long-term gain.
· Work on DIY projects. You can use your extra time at home to tackle home projects that have been on your list for months. Go through your closet and sell unwanted items online (thredUP and Poshmark are great for this) or complete small cosmetic projects (like painting or tiling the bathroom) that you didn’t have the time to do before. This is a great way to spend time at home during quarantine. Tackling small projects yourself can save you a lot of money and downsizing clothes, books or furniture you no longer need can result in less clutter and more cash!
· Learn something new. Take advantage of your extra downtime at home to educate yourself on things you want to learn more about. There are a ton of resources available online, and you can even apply for a library card online to access eBooks on your tablet or reader for free. To brush up on financial topics, consider reading (or re-reading) our book 35 Great Ideas (linked here)! This is a great, easy to read book with short chapters on all sorts of financial matters that lays a great foundation for smart financial planning.
Hopefully you can utilize some of these ideas for a more productive quarantine. Remember the benefit of having additional time available at home and use it wisely. You will win in the long run!