Money Management advise during coronavirus pandemic

SAN DIEGO (KUSI) – No matter your financial status, there’s a good chance the coronavirus pandemic will affect you financially in some way, shape, or form. The economic repercussions of closing businesses and social distancing is creating a financial chain reaction.

If you haven’t already started preparing yourselves, here are some money management tips from Steve Sexton, financial consultant and CEO of Sexton Advisory Group.

• Take stock of your emergency funds and backup reserves – An emergency fund is something you should’ve already been saving for – unfortunately, the reality is only 41% of Americans are financially prepared to cover a $1,000 emergency. If you’re lucky enough to still have a job during these strange times, I’d still recommend reviewing this emergency fund and crunching numbers to know what type of leeway you have in case you do lose income. If you don’t have an emergency fund to keep you afloat during the next few months, consider pulling money from other low-interest accounts, like your savings or CD accounts. Tapping into your 401k or IRA should be seen as a last resort as these are taxed and can tack up penalties/withdraw fees.

• Reduce expenses – If you don’t have an emergency fund, you need to reduce your non-essential spending now. Even if you have an emergency fund, the unpredictable nature of this pandemic means you should be more conservative in your spending. This is the time to reevaluate your cable bill and sign up for affordable streaming services, cancel wine club memberships, app subscriptions, scale back on pre-packaged foods, takeout, etc. This is also an excellent time to shop around for auto and home owner rates, which could potentially reduce your expenses in the long run.

• Look into mortgage loan forbearance – if you’re on the hook for mortgage payments, I’d recommend looking into a forbearance agreement – this is an agreement made between a mortgage lender and delinquent borrower in which the lender agrees not to exercise its legal right to foreclose on a mortgage, and the borrower agrees to a mortgage plan that will, over a certain time period, bring the borrower current on his/her payments. Having this option as a backup plan could provide some relief during these economic times.

• Call your credit card company to extend payment due dates and waive late fees – Chase, American Express, Capital One, Citi and Discover are among credit card companies that have offered to provide assistance to those financially burdened by the coronavirus pandemic. If you haven’t already called you credit card company, get in touch with them this week to determine what their policy is.

• Seek out local relief funds  – If you’ve exhausted all your options, there are local relief packages that can help. The City of San Diego announced a $4 million relief package for small businesses. United Way of San Diego County also is offering emergency assistance for low-wage workers who need help paying bills or making rent/mortgage payments during the pandemic.