This week, Maggie is giving some tips on how you can be smart with your money, even during a global crisis.
Things feel really scary and uncertain right now! It’s totally valid to be anxious and overwhelmed. One thing you can do to regain a sense of control is to make some smart money moves. Here are just a few ideas to get you started:
Do an audit of your budget and see which spending is not essential right now.
Pause any recurring payments that you aren’t using right now, like your gym membership.
Avoid shopping online. It’s a common stress reliever but could put you into a worse financial situation.
Prioritize funding your emergency savings, especially if your income is at risk.
Contact your federal student loan provider to suspend your student loans if you can’t currently make the payments.
Keep your eye on your long term financial goals, like retirement and paying down debt. Continue to contribute what you can afford.
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Maggie Germano (00:11): Hey there and welcome to the money circle podcast. This week’s episode is brought to you by Stitcher premium. Right now is a great time to listen to some of your favorite shows Ad-free on Stitcher premium. Some of my favorites are the neighborhood. Listen, scam goddess Conan O’Brien needs a friend and many more did. Your premium is only four 99 a month or 34 99 a year, but if you use the code money circle, you can get your first month for free. Go to stitcher.com/premium to sign up today. Thanks so much for listening this week. In case you’re a new listener, I’m your host Maggie Germano. Money circle is a podcast for women who want to get their money right without being made to feel like failures. Each week I answer listeners’ money questions and interview amazing women who are lifting other women up with their own work. Don’t forget to rate, review and subscribe in your podcasting app so that more people will hear about this podcast and listen.
Maggie Germano (01:04): This week. I’m here again to talk about the coven 19 crisis and to give you some tips so that you can feel just a little bit more in control of your finances. I was going to record this episode last Friday, but I just could not focus. All of the covid 19 news has been so overwhelming and things are changing every single day. On top of that, one of my neighbors came over and offered to let us borrow one of his guns in case shit hits the fan. We weren’t really worried about needing to defend ourselves during this time except for protecting ourselves against the virus, so that kind of stressed us out more than we found it to be helpful. So I had no more productivity left in me after that. However, luckily I did have a conversation with my awesome business coach on Friday and she reminded me that even though it’s totally normal to be overwhelmed and stressed right now, it’s still important to keep moving forward.
Maggie Germano (02:03): And it’s funny because I actually gave that exact same advice to one of my own clients early last week. This client asked me how she could be thinking about her future financial goals in a time like this. I told her that since she is still employed and not at risk of losing her income, she should be working towards her goals as normal. Now only will this help her to be in a better financial place after all of this is over, but it’ll still help give her a sense of productivity and control in this very out of control situation. Her next question was what are some of the smart money’s decisions she should be making right now? And obviously that’s going to depend on your situation and your circumstances, but having that conversation made me realize that I think that this would be a really helpful piece of advice for anyone who’s kind of looking for more guidance or more control and really thinking like what should I actually be doing right now?
Maggie Germano (03:02): So here are just a few. Do an audit of your budget and see which spending is not essential right now. Obviously we’re not supposed to be really leaving our homes. We can’t go out to eat at restaurants. We are shouldn’t be going to any stores except for the grocery store and other places that are essential and we’re not going to be out socializing at bars and things like that. So that is automatically going to cut down on the amount of money that we’re spending that we would normally be spending on a day to day basis. Most of us also are going to be saving money on transportation costs and travel costs because a lot of that needs to be getting cut down. So those are very obvious, straightforward pieces that you can easily and necessarily cut out right now. However, there might be some other expenses that maybe you don’t need to be adding to right now, whether that is doing maybe a little bit too much delivery food or uh, maybe there are some subscriptions that you don’t really need to be using right now as life is kind of shifting.
Maggie Germano (04:08): But just doing an audit of your budget and seeing what can go and what maybe needs to go. This is also a good exercise in case you do lose your job or you do lose your income for a period of time. Having an understanding of what your bare bones budget actually is so that you know exactly how much money you need to actually get by to pay those essential bills to feed yourself, to get the health, the health care that you need, whatever it might be. So doing that bare bones budget, I can give you that sense of understanding what you might actually need to live off of if things were to go sideways next, I would pause any recurring payments that you aren’t using right now. For example, your gym membership is a good one. Obviously most places are closing gyms, so you’re not going to be going to your gym and using that service.
Maggie Germano (05:00): So this is a good opportunity to not have that expense. And obviously there’s also advice out there that says you should still be contributing to your local economy and helping your local small businesses. But it’s important to put your own oxygen mask on first and to take care of your own financial situation first. So if you are worried about paying for things like your gym membership, this is a good time to put that on pause and most gyms are going to be understanding and do that for you in this short term period. You should also try to avoid online shopping as much as possible. Obviously we’re not supposed to be leaving our homes right now, so any shopping that we can do is most likely going to be online, but it is a little bit of a slippery slope. So online shopping and shopping in general is obviously a common stress reliever.
Maggie Germano (05:56): But doing this while you’re cooped up in your home and you’re not able to be social and you are again trying to regain that sense of control, it can really lead you to a path of being in a worse financial situation down the line than you are right now. So put some boundaries in place for yourself, whether it is you know that you’re only allowed to buy one thing a week online that isn’t essential like food or you know, any other kind of boundary that you feel like you’ll be more likely to set for yourself and actually follow. So put some of those boundaries in place so that you don’t go overboard with your spending. You should also prioritize funding your emergency savings, especially if your income is at risk. So I saw something on Twitter recently that said, if you do not have a fully funded emergency fund, you should pause any extra payments on debt and reroute that money into your emergency fund so that if your income is vulnerable or you lose your job, that you will have some money to be falling back on and uh, that will allow you to be able to pay your rent and things like that.
Maggie Germano (07:05): So I wouldn’t give the blanket advice to stop making extra debt payments. Especially if you’re able to work remotely and you know that you’re very unlikely to be losing your income and you feel comfortable being able to keep working on paying down debt, then that is fine. In that circumstance, continue doing what you need to be doing. However, maybe you want to be putting a little bit extra money into savings. Even in my current situation, my husband’s job is pretty secure. He’s working remotely. Uh, all of my work is remote and virtual, so I don’t see things changing severely right now. Uh, but even though there is that security, there’s still general unease across the board. And so we’re trying to be more thoughtful of where our money is going and stashing more away into savings. So that is just something to consider depending on your situation, but it’s always important to make sure you’re prioritizing your emergency savings in general.
Maggie Germano (08:07): Next, you should contact your federal student loan provider to suspend your student loan payments if you can’t currently make them. So the Trump administration announced this past Friday that they are allowing borrowers to suspend their payments for any federal student loans for the next 60 days at least, and they will reassess in 60 days to see if it needs to be extended. Originally the plan was to just suspend any interest charges on top of student loans, but the payments would still be required. That has since changed, so if you are in a situation where you feel like you will not be able to make your student loan payments or if you need the majority of your money to be going towards other necessities, then you should contact your student loan provider and talk to them about suspending those payments for a period of time. It’s not going to happen automatically.
Maggie Germano (08:58): You do have to call and make that happen, so make sure that you contact them if that is something that you need. However, if you still feel comfortable making your student loan payments, this is a good time to actually do that because you are not going to be charged interest. It’s going to be a 0% interest on those federal student loans for the next 60 days or so. And so any payments you make will be going all completely directly to the principal and not towards interest. So you’ll be able to make a bigger dent on your student loans at least for the next couple of months if that’s something you can afford. And lastly, I would say keep an eye on your longterm financial goals like retirement or paying down debt or other goals you have. You should, if you can afford it to continue to contribute what you’re capable of.
Maggie Germano (09:47): Like I said to my client and like I’ve been saying to my friends and loved ones, is that this situation will pass. Eventually things will eventually go back to a sense of normalcy. And so you want to make sure that you’re still thinking about the future. The future is not going away. The goals that you want to achieve, the things that you want to do will still be there when this is all over. So you want to make sure that you were still doing what you could during this time to keep moving forward. Plus, like I mentioned, you will still be able to maintain a sense of control over your situation and like you are working towards something rather than life completely coming to a halt. So keep your eye on those longterm goals and do what you can actually do. Again, if your income is threatened or you have lost your job, then you need to be focusing on what’s going on right now just to get by right now.
Maggie Germano (10:41): But if you are in a lucky situation where you’re not having an interruption in your income, keep your eye on those goals. After my call with my client last week, she said this to me, she said, I feel better after chatting because it helped me calm down and think more about the future during a time when the present is so loud and pressing. I still check my bank account and investments as much as I did before covid 19 kicked off, but I am not approaching it with panic or anxiety, but just to be aware of what’s happening and how I can still reach my goals or at least not move away from my goals during these trying times. I was really happy to hear that from her because I think that sense of calm and that sense of control over being able to still work towards what’s important to you is pretty much the whole point of my business and so I really want to help provide you with the support and calm during this difficult, unprecedented time.
Maggie Germano (11:36): If you’re looking for a sense of control over your money right now, let’s talk. Send me an [email protected] or schedule a free discovery call with me via my website. I will also put a link in the show notes. Right now I’m offering $50 of my one-time financial coaching sessions for anyone who books one over the next six weeks or so. As a small business owner. I unfortunately can’t offer my services for free, but I can offer a discount to make things a little bit easier. So I hope to talk to you soon, but in the meantime, stay safe and stay home. Thank you so much for listening this week. Don’t forget to rate, review and subscribe in your podcasting app so that more people will hear about this podcast and listen. If you’d like to get more connected with money circle or with me, there are lots of ways you can do that. To join the free Facebook group, visit facebook.com/groups/money circle group to stay informed of any upcoming events, subscribe to my weekly [email protected] slash subscribe to learn more about my financial coaching services, my speaking and workshop offerings, or just to read my blog, visit Maggie germano.com you can also follow me on Instagram and Twitter at Maggie Germano. Thanks so much.
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