Withstanding pressure during the COVID Crisis
This financial stress episode is drawn from John’s appearance on “I Am the Community,” hosted by Vicky Pepper. Vicky and John’s conversation focused on financial stress during the COVID crisis—and what you can do about it.
Don’t miss these key points:
- The principle sources of pressure on most people’s finances are (1) reduced income and (2) price inflation.
- As a result, many people are piling up credit card debt.
- With these pressures, it also becomes more difficult to save for retirement.
- Try a “reverse budget” strategy: save first, spend second. That can help you increase the percentage of your income that you save.
- Download free budgeting software and track your spending for 3 months. Look at where your money went and ask, “Did I get the enjoyment I should from the money I spent?” If not, cut that spending and move the money to savings—or to necessities.
- Look at what you paid in taxes last year to your state and the IRS. If you can reduce it by even 2%, that is a lot of money to put toward savings or necessities.
- If you’re currently out of work due to the pandemic, consider these options:
- Ask your credit card company, car loan company, and mortgage company to delay your payments.
- The CARES Act allows certain individuals to take a tax-free distribution from their IRA now and repay it later. If you qualify, take as much as you can now and delay repayment for as long as possible.
- If you were working in an area that will not be rebounding soon (such as the travel industry), consider using this time to retrain in a different industry.
You’ll find many other great resources on our website, such as 19 Sources of Retirement Income, which offers ways to increase your existing retirement income. You’ll also see links to my book 5 Ways Your Wealth is Under Attack and my newest book, It’s Your Wealth, Keep It.
If you are new to Smallwood Wealth, schedule a Wealth Curve Conversation by clicking this link. You can also connect with us on social media, or call us at (800) 797-1000. Set up a free, no-obligation 30-minute phone call with a qualified advisor to learn ways to make your financial plan resilient in the face of the current pressures.