Budgeting Tips: How to Protect Finances During the Coronavirus Pandemic

Lidia Staron, author at OpenLoans
Lidia Staron   OpenLoans Marketing Manager
Personal Finance
I enjoy navigating people through important financial decisions.

Turn on the news at the moment, and all you will see is the panic regarding Coronavirus. Every disease has an impact on finances and can cause economic downturns, but this disease is unprecedented. Are we on the verge of the next financial crisis? How can I protect my finances during this difficult time? Is it time to look to get personal loans to get through the crisis?

Request a Loan Today*
By clicking “Get Started”, I consent and agree to the Privacy Policy and Terms of Site Use.
*By filling out the form above, you will be routed to OpenLoans.com’s loan request form.

Financial Impact of the Coronavirus Pandemic

Truth be told, we’ve never seen anything like this. Though there is some advice that normally helps in difficult times, we’ve not been here before as a society. In some industries, The coronavirus pandemic could be crippling, but in other industries, it could be an opportunity.

Just like the financial crisis of 2008, though there are casualties, the economy recovered in the long term. It is natural to expect the same after the coronavirus pandemic, but nobody knows when this will be.

Some industries are taking the brunt of the blow at the moment. For instance, tourism industries and restaurants are going to rely on financial help from their government to survive. Other industries are doing fine. Healthcare, for instance, and, perhaps, bizarrely, toilet roll manufacturers.

Is It the Next Financial Crisis?

Anybody who claims they can tell you whether or not this is the next financial crisis is lying. The facts we have at our disposal show a big economic downturn in terms of the stock markets. Some countries and some industries are coping far better than others.

The coronavirus pandemic is different from many of the other financial crises we’ve had. The 2008 financial crisis causes can only be described as man-made. There was a ticking time bomb. For a full overview of this, and to see just how different the situation was, we recommend reading The Big Short: Inside the Doomsday Machine.

The Coronavirus financial impact cannot be predicted accurately, which is why there is so much uncertainty in the markets. Some people think it is the best possible time to invest, and others are scared, and putting into place their pandemic preparedness plan to ensure that they don’t lose everything.

Should I Be Afraid of an Economic Downturn?

Yes and no. “Afraid” is probably not the best strategy to take. Instead, try to be as prepared as possible. Stability and safety is the name of the game in this difficult time. Many people are taking money out of higher-risk investment accounts and keeping it in a secure bank account. They stand to lose far less in this scenario, and though their money may not be earning more interest, it may have more security.

Some form of economic downturn may be inevitable. There has been a huge drop in some markets. However, a financial meltdown or economic crisis is not assured.

If in a few months, the virus is under control, it may well be the case that finances recover, and stock markets rally. Finding a vaccine is a priority, and could be a route to stabilizing the economy.

Budget tips for corona virus.

How Can I Protect My Money?

Ensure that your money is safe, first and foremost. Don’t put it all in high-risk accounts at this tough time. Different people have different strategies. For instance, paying money towards your property mortgage could be a way to ensure you have invested in brick and mortar. Some people always trust the property industry above and beyond any other.

People also have a lot of different strategies. For instance, people tend to invest in gold and silver when times get hard. There are a number of ways that you can look to approach your finances during the coronavirus pandemic, but risk-averse is the main rule.

What is a Viable Asset Protection Strategy?

If there is a downturn in the economy and a recession (which seems relatively likely) then you might need to find a way to protect your finances -- for instance, looking to keep three to six months worth of salary in a safe, secure savings account.

Assets can come in the form of many different bank accounts, investments, and things that you own. For a lot of people, the number one strategy could be to mitigate for emergencies (start saving emergency funds if you don’t already). The US consumer finance agency also has some tips on protecting your assets and managing financial issues as a result of Coronavirus.

Some people are offloading stocks, but this isn’t always a wise choice to make. If you don’t need to shift your stock then giving them time to recover could be wise. However, we live in uncertain times, and it is not always a good way to protect yourself. If money gets really tight, you might find that you don’t have any choice in the matter, but think carefully about what is likely to happen in the future. Panic is usually the reason for a stock market to drop, and you may not need to panic.

The best way to protect assets like property and investments could well be to wait it out. Though nobody knows for sure, it could be that this financial crisis will be temporary, and the coronavirus pandemic can be tackled effectively. If we can rid the world of this virus, then we might have a case where in six months things get closer to how they were before. Investments can recover.

What Can I Do if I’m out of Money?

There are a lot of different options for people who are out of money. We all need money month to month in order to function and buy groceries.

  • If you are struggling, you may be able to talk to companies to whom you owe money, as per government advice on paying bills.
  • One thing everyone should do is look at what support is available locally. Different governments have put things in place to provide financial support, especially to people with families.
  • Whether you are looking for personal loans without a bank account, or you need to get a credit card, there are ways you can borrow, especially if you have a decent credit rating.

Making Money During the Coronavirus Pandemic

People losing their jobs may still be entitled to some benefits to help to get through difficult times, and if they are totally out of money, then it could be a desperate time. Speak to your local authorities and look to find out exactly what support has been put in place.

Alternatively, if you can continue to work online and find a way to keep earning money, this should definitely be high on your list of priorities. Try to be creative about your work, and see if there are ways that you can continue to offer your services online.

Borrowing as a Last Resort

As a last resort, you could look to borrow money. Sometimes, your cash might be tied up elsewhere, and borrowing with the security of knowing you have assets might be relatively risk-free. People should always exercise caution when they are looking to borrow money and ensure that there is a plan to pay it back.

There are a number of personal loans for fair credit or even some for poor credit, so you don’t have to be in amazing financial health to get a loan.

Conclusion

The main takeaway from this should be the fact that nobody knows exactly what is going to happen. When it comes to your finances and the coronavirus pandemic, there are low-risk and high-risk strategies. Some sort of pandemic preparedness plan is almost essential that at this time, most money and banking strategies are low-risk, at least until things start to recover.

At times of a pandemic, health crisis, or financial crisis, it is important to make sure that you and your family are looked after. Keep your money safe to ensure you can buy groceries and pay for the essentials. If times get hard, you might have to talk about options in terms of asset management.

 

X
Advertiser Disclosure

The offers that appear on OpenLoans.com are from companies from which OpenLoans.com receives compensation. OpenLoans.com does not make loan offers, but instead pairs potential borrowers with lenders and lending partners. We are not a lender, do not make credit decisions, broker loans, or make short-term cash loans. We also do not charge fees to potential borrowers for our services and do not represent or endorse any particular participating lender or lending partner, service, or product. Submitting a request allows us to refer you to third party lenders and lending partners and does not constitute approval for a loan.