Being Smart with your Savings and Retirement Funds during this Difficult Time
At present, large parts of the world are on lockdown status due to the rapid spread of Coronavirus. While it may be little more than an inconvenience for some individuals in that they cannot leave their homes as often as they like at the moment, for others, it spells financial disaster because of the fact that a number of them are unable to go to work to earn a living.
As such, it has become more crucial now than ever before to ensure that you work as wisely as possible with any money you may have available to you at the moment. Below are a few ways in which you can stretch each dollar as much as possible.
Consider Filing for Unemployment
Although the rules to qualify for receiving unemployment benefits tend to vary from one state to another, many have become somewhat more lenient with regards to providing financial assistance to families where breadwinners have been laid off or had their hours cut substantially as a result of Coronavirus.
In many cases, applications to file for unemployment can now be completed online, which can save a lot of time and effort.
Avoid Dipping into Retirement Accounts
When times get tough, many individuals turn to their retirement accounts as a convenient way of borrowing money. However, this is not recommended because you will be penalized in two ways. Firstly, you will lose out on any interest that would have accumulated on the amount of money you’ve borrowed, and secondly, you will highly likely be taxed on the amount of money that has been borrowed from a retirement fund as well.
In fact, many financial experts only recommend dipping into your retirement funds if you are facing immediate foreclosure on your primary residence.
Only Purchase Essentials
When funds are as tight as they are because of shortened working hours or layoffs, it’s not the time to consider purchasing a new flat screen TV or another pair of fashion shoes. Instead, restrict all purchases at this time to genuine essential items such as food, rent or mortgage, transport and utility bills.
In situations where you’ve been granted a reprieve for paying any of the above-mentioned bills, keep in mind that once the lockdown period has ended, all outstanding amounts may become due with immediate effect. As such, it’s strongly recommended that you continue paying as much as you possibly can on rent, mortgage, utilities and car notes.
With regards to groceries, you can save up to 30% on your bill if you’re willing to opt for store brand items, plan weekly meals around sale items and reduce the amount of non-essentials that you put in your cart such as crisps, soda and other luxury items.
Although the next few months may be extremely tight financially for several families, keeping the above-mentioned tips in mind can go a long way to help get the most out of every dollar wherever possible.