Coronavirus has changed everything for everybody. There is no doubt about it. Everyone’s personal finances are or will (or should be) be impacted – whether you keep your job, lose your job or never had one to begin with (already unemployed, retired, etc.) SAVING AS MUCH MONEY AS YOU CAN IS PARAMOUNT. Beyond, that simple imperative, my strategy is simple and two-fold: cash is KING and bring RECEIPTS.
Today I will tackle the first statement: CASH IS KING:
- Spend little, very little. Re-evaluate everything based on your current situation or what may become your situation. If you are paying for subscriptions and are in a financial situation where spending $9.99 a month can make or break you, cancel it asap. (I told you before that I hate paying for subscriptions… NO RECURRING BILLS!).
- Budgeting / expense tracking goes without saying but, I recently read a new way to categorize and keep track of EACH AND EVERY purchase you make. The new categories are: Fixed, Discretionary, Reduceable, or Forbearance Eligible. (Frugal Woods) I am definitely doing this!
- Here’s the deal… I am delaying everything I can, even it if means a large lump sum payment at the end of the forbearance period. Why? Because we don’t know what we don’t know – this is true for income, expenses and what the federal, state or local government may or may not due over the next 6-9 months. If you are already financially responsible, making a payment equaling to x number of months you are in forbearance for your mortgage should not scare you (required with the new bill – READ!!!) If you are not financially astute or able to save large sums of money and can afford to pay your mortgage each month, continue to pay. If you cannot pay and need to prioritize eating over paying your mortgage, I think you know what to do – just be sure call your mortgage company (or landlord) and ask for help. More likely than not, they will oblige.
- As it relates to (government) student loans, we all get 6-months no payments / no interest / no lump sum due at the end. I will not be paying my normal $200 month during this automatic forebarance period. What I AM going to do is pay my loan completely off on September 29th (the day the forbearance period is up) – pending no drastic changes in my financial position. There is no financial gain or benefit or negative impact to me paying today vs 6 months from now, except that my CASH will continue to sit in my savings account, earning a very small amount of interest; but, I will take that thank you very much! The beautiful thing is that I was planning to pay my student loans off this year anyway and my payment will go 100% towards my principle. WIN!
- I also refinanced our mortgage at exactly the right time. Saves $250/month AND because it’s a new loan, we get to skip 2 months of our mortgage payments (just like when you initially close on a house). WIN!
- I have been an avid user of my rewards credit cards, most recently the Delta American Express since I already have Lifetime Titanium status with Marriott. Last week I switched from using my AMEX (reward credit card) to my debit card. Why? First, ain’t nobody going anywhere anytime soon and Secondly, I know that I will evaluate expenses much more carefully when I use my debit card. I changed the default payment method on my normal accounts such as Target. DO WHAT WORKS FOR YOU.
- Finally, I organized my pantry. Going out for groceries is essential; but, not it you have things at home you can eat. Seeing all of your items helps greatly and can reduce your spending! Check out my recent post on how I did this – now, it’s true I didn’t have to buy those baskets, especially in this uncertain time; but, I did. And I will continue to check daily for price reductions for the items I purchased to try and save a few more coins by asking for a price match (over the phone).
I am reading a lot more these days – mostly online – because there is a lot I don’t know. Things are constantly changing. Blogs, news, you name it! READ THE FINE PRINT to make sure you understand EXACTLY what is or is not. None of our opinions matter, only the facts. And certainly not #FAKENEWS. Treat what people tell you about your finances just like you do sayings for the bible – READ IT FOR YOURSELF FROM THE ORIGINAL SOURCE, not a third party! Context is almost always required. There is no single answer / approach that can or should be applied to your unique circumstance.
Now, my last question is how much cash do you actually have? As in assets? Can you prove it? We will discuss in my next post, stay tuned!