Achieving Financial Stability During a Pandemic
The ongoing pandemic is “Exhibit A” on the need for an emergency household fund to get you through tough times.
A new study from Country Financial bears that sentiment out. According to the survey, “nearly half (49 percent) of Americans say their level of financial security is worse since the COVID-19 pandemic began. One-third (33 percent) admit they were not financially prepared for a pandemic.”
COVID-19 has triggered a survival impulse among Americans, with the study showing that “many Americans are prioritizing day-to-day survival over long-term financial goals.” According to Country Financial 45 percent of Americans say their top financial goal since the pandemic hit is to pay day-to-day expenses, followed by saving for an emergency fund (27 percent), saving for retirement (16 percent), and investing in the stock market (5 percent).
The good news? Even in the midst of a pandemic, it’s not too late to create and sustain a household finance strategy for the long haul.
"If you haven't developed a financial plan, now is the time to kick planning into high gear and assess what your short-term and long-term goals are," said Troy Frerichs, vice president of investment services at Country Financial. "If you’ve developed a plan but haven't been good about keeping to your goals, now is the time to re-commit and work on developing better personal financial habits."
"This is an incredibly difficult time for so many Americans because we have never experienced a pandemic like this before," Frerichs added. "At a time when we feel like so much is out of our control, we have to focus on what is in our power, which is how much we spend and what we save. Cut spending where you can and concentrate on paying bills on time to avoid a buildup of debt and fees that will have to be paid later."
In its report, Country Financial offers some common sense tips to boost their financial health even during a pandemic – and long afterward.
Develop a budget: The pandemic is forcing many Americans to make hard choices – particularly cutting expenses – so it's more important than ever to use this time of uncertainty to establish a budget and commit to living within your means.
Create an emergency fund: Many Americans struggled to build an emergency fund even before the pandemic, but an emergency fund is now more important than ever. If our current financial situation gets worse before it gets better, Americans need to have money set aside that they can lean on as a last resort. If you don't currently have an emergency fund, try to set aside as much as you can every month and aim to build enough to cover between three-six months of living expenses.
Explore opportunities to lower interest rates: The pandemic has led to lower interest rates, which may provide a great opportunity for some to get closer to their financial goals, such as paying off debt or lowering a mortgage payment. Connect with a financial representative and lenders to explore all of your options; just be sure to read the fine print and take any associated costs into consideration before making any decisions.
Evaluate your long-term goals: While many of us are just thinking about how to get by right now, it's important to look beyond the pandemic as well. Talk with your financial representative about where you stand with your long-term goals and review your strategy for achieving them.
Following the above steps does require patience, discipline, and diligence – characteristics that can be in short supply during any crisis. But sticking to the script and saving for the long term will steadily improve your financial situation.
That results in what anyone wants in their lives – financial stability.
Even during a pandemic.