Financial Impact of COVID-19
- The Economic Impact of COVID-19 in Low and Middle-Income Countries
- COVID-19 could affect the global economy in three main ways
- COVID-19 Implications for Businesses
- COVID-19 and Your Finances
- COVID-19 Will Hit Minorities The Hardest
- CNN: Coronavirus will change the grocery industry forever
- Coronavirus Leads China to Ban Wildlife Trade
COVID-19 and Scams
Inevitably, natural disasters and national crises will spawn a wave of scams and fraudulent services. It does not take much imagination to see such activities surfacing already such as the following:
- Beware of snake oil salesmen peddling “secret” cures and vaccinations to anyone desperate enough to pay for them. Such remedies will come in the form of pills, herbal formulae, and non-traditional treatments. Although you might want to justify spending money on outlandish claims in the “hopes” of it being helpful, hope and fear are polar opposites. Hope leads to positive changes while fear leads to negative choices. Pay attention to the irrational claims you hear or read as well as to your gut instincts.
- Avoid becoming the victim of unethical activities that pray on your fears and our collective panic. We have already seen this in play in our rush to clear shelves of toilet paper, but if you find an “opportunity” to buy such supplies online at exorbitant prices, do yourself and your bank account a favor and steel yourself against overreacting.
Worse yet are the outright fraudsters who will offer to sell “emergency equipment” and supplies for some supposed doomsday scenario, peddling generators, hazardous materials suits, filtered facemasks, goggles, and surgical gloves, and coronavirus first aid kits. Most of these items will never be required or used. As for goggles, gloves, and first aid kits, they will be no different in a “Coronavirus Kit” than what you would find in the first aid kit you may already have in your bathroom, with the exception of the ridiculous price. Such excessive pricing can be termed profiteering, and you do not want to fall victim to it just because of fear and panic.
Should I stop investing in the stock market?
Consider what Warren Buffett did when the stock market plunged in 2007, 2008, and 2009. Instead of selling stocks in panic or staying away from the stock market, he jumped in feet first. The stock market will rebound. Is now not the best time to take advantage of other people’s panicking? Certainly, you would at the very least be wise NOT to cancel any automatic monthly investments through your 401(k) or IRA.
Should I stock up on supplies in case of quarantine?
Nobody likes the thought of being quarantined for days, let alone for weeks. Look in your cupboard for canned foods and supplies you could use in case of such an emergency. Before you head to the grocery store to empty the shelves, remember that current quarantines are just two weeks, not two months. In a pinch, you will likely have a friend, family member or neighbor who could do your shopping for you, not to mention your option of ordering groceries online.
BUDGETING FOR COVID-19 DIRECT IMPACTS
As the pandemic reaches into all 50 states, and into most communities, having a plan for spending your resources wisely will benefit you today and into the future. If you do not have a spending plan (aka budget) for your household, now is certainly a better time than later to put one together.
A budget is simply a plan on where you would like your money to go. To prepare for potential health issues and medical expenses, it would be wise to divert some discretionary spending from activities like dining out, going to the movies, vacations, and even subscription services, to an emergency savings fund for medical-related expenses.
PRIORITIZING EXPENSES
Typically, this includes housing and utilities, food, transportation, and communications, and some clothing. I do not believe households should go into financial lockdown because of this virus pandemic, a household should always consider their priorities. In times of crisis, what is most important to us comes into clearer focus. Ask yourself if your spending money is going to the most important priorities in your life.
COVID-19 AND DEBT
Do not discount the continued importance of paying down your debt balances consistently and paying them on time every month. COVID-19 will not be the end of society as we know it, but if you stop making payments to your creditors, you could put yourself into a financial hole that will take years or even decades to dig out of.
HOUSEHOLD SAVINGS AND COVID-19
Throughout this pandemic, most households should continue to contribute to their savings funds so long as there is income coming in the home. Do not max out your income and credit cards because you are worried about a run on toilet paper. Do not go online to stock up on a year supply of hand sanitizer. Instead, follow the guidelines from the CDC while continuing to contribute regularly to your emergency savings fund as well as to funds for your short-term goals.
In the end, while COVID-19 is already causing temporary disruptions to our entire society and even the unfortunate death of many of our co-citizens, it is quite possible that in 20 years we will look back on 2020 not as the year of COVID-19 but as the year of the Great Toilet Paper Panic.
[Curated content based on excerpts from posts, blogs, media articles, and sponsored research]
