As the coronavirus continues to spread and has officially reached pandemic status, entire countries including China and Italy have gone into lockdown, leaving businesses without customers and employees without paychecks.
In the U.S., the numbers of cases and deaths are rising rapidly, and talk is growing that the outbreak could lead to a recession. But many Americans are unsure how they can stay physically and financially healthy.
Your first instinct may be to stock up on essentials and barricade yourself in your home, but hand sanitizer and toilet paper won’t save you from the economic repercussions.
Here are some tips for protecting your money from the financial fallout of the coronavirus.
1. Boost your emergency savings
If your employer shuts down operations due to the coronavirus – even just temporarily – it could hurt your ability to cover your monthly expenses.
Do you have emergency savings? Many financial planners recommend stashing away enough money to cover at least six months of your regular bills, like your mortgage, car payment, utilities and groceries.
There’s no need to panic if you haven’t saved up enough to sustain your household for half a year, but you should start building up a solid emergency fund as soon as possible.
Even putting aside just $60 a month ($15 dollars a week) can help you create a financial cushion for lean times.
And be sure to keep your emergency fund in a high-yield savings account – so your savings will accumulate the best possible interest and grow over time.
2. Buy stocks on sale
Fear of the coronavirus has caused the stock market to take its biggest dive in over 10 years, since the financial crisis in 2008. And while now might seem like a scary time to invest, any seasoned trader will tell you that a down market is a great opportunity to buy high-profile stocks at bargain-bin prices.
Personal finance guru Suze Orman recently went so far as to say investors should “rejoice” over the market’s drop.
There’s a ton of quality bluechip stocks (airlines, cruise lines), or index funds, “on sale.” Index funds like the Vanguard Total Stock market index fund(VTI) are getting close to two-year lows and are perfect for conservative buy-and-hold strategies.
With big reward often comes big risk, however. Whenever you try to “time the market” there is a chance you might pick the wrong time.
It’s a risky strategy, so tread lightly, and consult a professional if you want some insight. If you’re not sure where to start, robo-advisors take the emotion out of investing and automatically readjust your portfolio in line with changing market conditions.
3. Protect your income
As the coronavirus has demonstrated, everyone is susceptible to unexpected illnesses. And let’s face it: There’s always a possibility that a serious medical issue could leave you too sick to work and unable to pay your bills.
If you want to protect yourself from the financial strain of a long-term health problem, you should consider purchasing disability insurance.
Getting coverage is easy: Some companies let you get it all done online, so you won’t have to deal with any pushy salespeople pressuring you to spend more.
The whole process can take about 15 minutes – you just answer a few questions, choose a plan, and apply.
You can never guarantee you won’t get sick, but you can ensure you’ll have enough money to support yourself if you do.
4. Make the most of your time off
If the coronavirus leaves you sitting at home for days (or possibly weeks) with your primary source of income on hold, you’ll likely want to find a way to make some quick cash without venturing outside.
If you’re a talented writer or graphic designer, there are plenty of freelance gigs that you can find online to fill your time. And if you’re not using your car to commute to work, you can even rent out your car while you’re not using it. (And you can even hand over the keys via a lockbox, so you won’t have to meet anyone in person and risk sharing infections).
Being cooped up inside or working from home can get boring. Why not find out if you can get gift cards while surfing the web or shopping online? You’ll likely be ordering necessities off Amazon anyway.
And if you’re not really interested in working during your time at home, you can try saving money by asking for a discount on your car insurance since you won’t be using it much.
You might as well make the most of your time while you wait for life to return to something close to normal.
5. Prepare to leave your family $1 million
The coronavirus has already claimed thousands of lives, and the number keeps swelling. We’d all rather not think about the worst-case scenario, but it’s a good idea to be prepared, just in case.
If something happens to you, you want to be sure you’ll leave your family financially secure. The simplest way to do that is to buy life insurance.
There are three basic ways to buy life insurance:
- Directly from an insurance company.
- Through an independent local insurance agent.
- Through an independent online broker.
The easiest and safest way right now to get life insurance is online. There are free online services that make shopping for the right plan as simple as booking a plane ticket.
Depending on where you live and how old you are, rates can be as low as $7 a week for a policy that gives your loved ones $1 million in financial protection.
The spread of the coronavirus is a strong reminder that you can’t predict the future, but taking steps now to protect your family will give you valuable peace of mind.