7 Financial Hacks For Your Wallet To Survive The Pandemic

7 Financial Hacks For Your Wallet To Survive The Pandemic

Here are seven money hacks from financial experts to help your wallet survive the coronavirus pandemic during these tight times. Photo: Unsplash

Pockets are empty and purses are tight. Most Americans are feeling a financial pinch from the coronavirus pandemic costs and shutdown.

About a quarter of Americans say they have lost savings and about as many have lost income during the pandemic, according to the latest Covid Response Tracking Study, conducted by NORC at the University of Chicago. Two people in 10 report losing a job and another 20 percent say they have put themselves at risk of exposure to the virus for work, Fox Business News reported.

Here are seven financial hacks for your wallet to survive the pandemic.

Max out your retirement contributions now

“For those who have a tendency to max out their 401(k) contributions every year, it’s not a bad time to accelerate your annual contributions and allow those funds to accumulate in a money market or stable value fund,” said finical expert Malcolm Ethridge. Why? Because whenever the next great buying deal happens, the dollars will already be in those accounts and ready to take advantage, wrote Ethridge, a financial adviser with CIC Wealth Management, in Business Insider.

Also, consider accelerating any planned contributions to a traditional or Roth IRA. In 2020, the maximum contribution permitted by the IRS is $6,000.

Black Americans Have the Highest Mortality Rates But Lowest Levels of Life Insurance
Are you prioritizing your cable entertainment bill over protecting and investing in your family?
Smart Policies are as low as $30 a month, No Medical Exam Required
Click Here to Get Smart on Protecting Your Family and Loves Ones, No Matter What Happens

Use your company’s employee stock purchase plan

If you work for a publicly-traded company you are probably able to participate in the company’s Employee Stock Purchase Plan (ESPP). Under such plans, employees can purchase shares of company stock at a discount — typically at 15 percent. 

“In a broad market selloff like the one spurred by the covid-19 pandemic this past March, all companies saw their shares sold off, irrespective of their underlying fundamentals or financial strength,” Ethridge wrote. “Should we see a repeat of such events in the future, participants in an ESPP would be able to claim an additional 15 percent on top of the inherent discount that comes with buying stock in a quality company during a broad market selloff.”

Break down your expenses

If your salary has been cut or you lost your job, now is the time to tighten your belt. But you have to get financially organized. Separate your expenses into must-haves, want-to-haves, and don’t-need-to-haves, said Jean Chatzky, a personal finance journalist and CEO/co-founder of HerMoney.

“You need to look at your budget or make a budget if you don’t have one, and figure out what you actually need to spend your money on and what can fly, at least for now,” Chatzky said in a report in The Simple Dollar.

This way you will also be able to know which lenders you should reach out to for some relief from payments.

Track your spending

Fewer Americans are budgeting their money, according to polls. In 2018, a Debt.com poll of more than 1,000 Americans revealed that 70 percent of respondents had their family on a budget. In 2019 that dropped to 67 percent. Now is the time to budget. 

It’s not as hard as you think. “I think the easiest way to start budgeting is to do it backward. Track your spending, take a look at where all your money is going and has gone over the past few weeks, and then look at where you can adjust,” said Chatzky.

Use the 75-percent formula

Live off of 75 percent of your income and save 25 percent, said William Parker, founder of The Wealth Engineer financial program and author of “How Did You Get HERE?” in a 7KLTV interview. 

That’s the ideal. But you can start with saving 10 percent and living off of 90 percent of your income. Then work your way up to saving 25 percent. This will give you a financial cushion when confronted with situations like covid, Parker said.

 Try ‘mental accounting

Become disciplined about how you spend. To make it easier, Mariel Beasley of Duke University’s Common Cents Lab advises people to use “mental accounting.” The behavior science lab focuses on the financial well-being of low-income people.

Mental accounting will help you label and physically separate your money, said Beasley.

“This strategy will help you stick to your spending plan by reminding you of your opportunity costs — i.e. what trade-offs you might be making with each purchase,” Beasley told CNBC Select.

Mentally separate your spending into three categories: Your bills (such as rent or mortgage, utilities, child care, car payments, insurance, phone); current expenses (spending that you plan to do within a week, such as  groceries, gas); and future expenses (retirement savings or an emergency fund).

Listen to GHOGH with Jamarlin Martin | Episode 73: Jamarlin Martin Jamarlin makes the case for why this is a multi-factor rebellion vs. just protests about George Floyd. He discusses the Democratic Party’s sneaky relationship with the police in cities and states under Dem control, and why Joe Biden is a cop and the Steve Jobs of mass incarceration.

Be prepared

“Don’t wait until your cash runs out to find ways to meet your needs,” Beasley says. 

Look into getting government financial help, such as SNAP (food stamps), Medicaid, and HEAP (heating your home). Also check if local organizations such as churches and charities are helping residents with the job hunt or offering food donations.

“Identify local programs or check with your local food pantry before you get to the point where you can no longer purchase groceries,” Beasley said. If you’re struggling to make credit card payments, contact your creditors to see if you qualify for a reduced interest rate on any of your payments, ask for discounts and deferment programs. Many are offering coronavirus pandemic financial hardship assistance.