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These decisions were a bright spot during challenging times.
The COVID-19 pandemic forced many changes – most of them severe. However, during these turbulent times, I have made three financial decisions that I am really happy with. They have already paid off or will do so in the end. Here’s what they are.
1. I kept my money in the stock market
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When the pandemic hit the US hard in March and the states started hitting, the stock market crashed. Read also : Will selling my own home save me money?.
Fortunately, I tend to invest long-term, so I made the decision not to sell any of my shares or make any other adjustments to my existing holdings. Instead, I decided to increase the amount I invested in the stock market, looking at the crash as a buying opportunity.
The market quickly collapsed and my portfolio balance sheet has grown significantly since March. As a result, I’m glad I got stuck on my arms and did not allow panic to sell me into a loss during the downturn.
2. I refinanced my mortgage
Mortgage costs fell dramatically during the pandemic and hit record lows several times. When I saw how low prices had fallen, I made the decision to refinance my loan. See the article : Will selling my own home save me money?. This choice has reduced my interest rate so that the cost of the loan is lower.
And I was able to actually refinance a cash out on my home equity loan and use the money to completely pay off a loan on another property I had. This means I have reduced my monthly obligations and streamlined my payout process because I now have one loan instead of two.
Mortgage costs have been rising in recent weeks from record lows. While they remain competitive, I’m glad I jumped at the chance to refinance at an extremely low rate that will not be available again soon.
3. I redirected my dining out budget to emergency savings
As going out to restaurants is impossible due to the pandemic, we decided to cook more at home instead of taking it away. This has freed up quite a lot of money in my budget. To see also : Will selling my own home save me money?. While we do not eat all the time, we do so quite often because it is challenging to cook, take care of a baby and work. But we were pleasantly surprised to find out that we actually enjoyed making food.
When I stopped eating so much, I decided to return the extra money I had spent in the restaurants to raise my emergency fund. I have already reserved money for emergencies. But with the economic insecurity that the virus caused, I decided that I should provide even more cash for a rainy day. As a result, all the money earmarked for restaurant expenses goes directly to a high-income savings account.
Through these decisions, I saved more money in my investment portfolio, plus I reduced monthly payments. I am well aware that this is not the experience for everyone, or even for most people, and that I was very privileged to keep my income and make those decisions. Many others did not have such luck.
For people in financial difficulty, the government has provided more relief than a recently approved third stimulus bill that expands unemployment benefits and is in the process of sending $ 1,400 stimulus checks to most Americans. These direct payments may not be enough to help you meet all your financial obligations, but it’s a start. If you need other financial assistance, check out our Coronavirus resources to see what is available.
And you should not feel bad when you emerge from the pandemic in a difficult financial situation, because that is the fate of millions in the face of this global crisis. But hopefully, when life is back to a new normal, you will also have the opportunity to get back on track and make financial decisions that set you up for a more secure future.
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About the Author
Christy Bieber is a personal finance and legal writer with more than a decade of experience. Her work has been featured in major retailers including MSN Money, CNBC, and USA Today.
