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There’s no doubt that COVID-19 has left a huge hole in the momentum of working professionals around the globe. And with aid relief packages taking longer than usual for governments to approve, many people are searching for answers on how to forge ahead.
Thankfully, there are tons of insightful industry leaders that offer sound pieces of financial advice during these difficult times. Whether you’re a freelancer trying to weather the storm or a full-time employee wondering what you can do to make some headway, these 5 gurus can steer you in the right direction.
Before making any drastic changes right away, Brian Madgett advises individuals to first re-evaluate their financial strategy.
Primarily, this means taking a look at your current situation and re-tooling your finances to live within your means. Therefore, one should evaluate what their monthly expenses are, what amount of money they can pull in each month, and in what areas can they scale back spending to reinvest that amount into an emergency fund.
For instance, if you typically spend $100 a week on eating out, put that routine on pause and sock that extra $100 away for anything unexpected.
Getting back to the basics is always a great way to assess your financial situation, and from there, you can make better decisions for the future.
Buffett offers a slew of financial wisdom that anyone can benefit from. After all, he is a billionaire who has the magic touch when it comes to turning a profit. However, he also offers lots of practical know-how that people should consider.
Especially during the COVID-19 pandemic, one of the most important tips that Buffett offers is to clear any credit card balances as soon as possible.
Of course, it makes sense that consumers add to their credit debt in the midst of being strapped for extra cash from the pandemic, but sadly, the interest rates on credit are steadily increasing, which means you’ll most likely have to pay back much more than you initially owed.
According to Buffett, the best thing to do is to pay it off entirely or consolidate that debt into a loan at a better interest rate that you can handle. Perhaps once that second stimulus check comes in the mail, you can direct a portion of it (if not all of it) toward making a fresh start with any looming balances.
Along with cutting interest rates for credit cards, Marguerita Cheng—an experienced CFP—suggests that the Federal Reserve has slashed interest rates on mortgages, which can be a great place to save some dough.
Due to the COVID-19 pandemic, interest rates have been dropped substantially for homeowners. And it doesn’t matter if your current interest rate only drops by half of a percent—the change can still save you upwards of thousands of dollars if you refinance.
Cheng also offers that it may be a good time to consider shortening the length of your loan, too. By refinancing and decreasing the term of your loan, you can reinvest those savings back into your home, pay off the loan quicker, and then wind up saving more money down the road.
Low-interest rates won’t last forever, so it’s best to strike while the iron’s hot.
In a recent interview with CNBC, Mariel Beasley of Duke University’s Common Cents Lab—a behavioral science lab centered around financial success for low-income individuals—took the time to share some valuable insights around budgeting.
Out of her top three suggestions, one of the best to consider is your “budget cash outflow vs. your cash inflow.”
Essentially, you want to think about your current income on a “per-spend basis.”
For example, consider how many times you need to get gas in between each payday and then set aside a budget for each individual trip—not throughout the whole month.
With that understanding, if your monthly gas budget is $160, and you typically stop for gas 4 times throughout the month, then try sticking to a $40 budget per trip. Maybe one week you end up driving less and only spend $20 on gas. Or perhaps you decide to carpool with a friend that week. In any case, you’re cutting your larger budget into micro budgets that will help stretch your dollar further from paycheck to paycheck.
Personal financier—Brian Menickella—contributed an article to Forbes in May of 2020 with some excellent financial tips for anyone trying to survive the COVID-19 landscape.
Although much of his advice is geared toward investors, the best insight he has to offer for the average working professional is to take advantage of 0% credit cards.
Now, don’t be alarmed.
Other schools of thought mentioned here advise you to stay away from credit card debt, but with initial annual percentage rates (APR) at 0%, and with generous cashback offers or rewards, using a credit card can be a great way stay afloat financially until the economy bounces back to normal.
Now, everyone’s financial situation is different, but with these 5 principals, you should be able to create a strong foundation to help you support any potential pitfalls.
WIth AND.CO, there are plenty of tools to help take these tips a step further, too. You can set up payments, track expenses, set up client lists, and even manage your time working to maximize your output. Best of all, AND.CO is completely free for basic users. You can enjoy lots of financial benefits from the platform, but if you want to take things to the next level, you can sign up as a Pro user to unlock more resources.
COVID-19 may not be going away any time soon, but you can set up the right defense to stay ahead of the curve.
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