Why do you need to look for financial support during this health crisis?
As the Novel Coronavirus spreads throughout the country, it is putting tremendous strain on the economy. In turn, businesses and other companies are trying their best to stay afloat. With limited movement on people, operations are struggling. Brick and mortar stores are losing out on valuable foot traffic. Employees are also staying at home in a bid to limit the spread of the virus. This hampers the flow of business operations.
If you were given the chance to work from home, you need to grab it. There are other Americans who are on furlough. Some were let go because the company they worked for cannot continue with their overhead expenses. There are also instances where you are able to work from home but on reduced pay. This is meant to try and retain a workforce in the middle of a challenging time. It is actually better than being laid off.
Whatever your situation is, there is a good chance that you will need financial support. It could be to help you with essential needs now or just to pay a bill. Even with the pandemic, life goes on and so are the bills. You need to also purchase what you need to survive. These are all going to become a challenging ordeal when this pandemic drags on.
This is the reason why you need to know the financial options you have. While the topmost concern is to flatten the curve of infection, you need to manage your needs at home. As the medical industry races to find a cure, your best bet is to stay at home or limit physical interaction with people outside your house. This is important as the CDC reports over 1.2 million people with COVID-19 in the US. If you are worried about your finances, here are a few options to look into.
Get financial support from your emergency fund
If there is ever a good time to use your emergency fund, this is it. At the moment, there could be no other bigger emergency than this pandemic. Remember that it is not only affecting the US. The COVID-19 ravaged through Asia and Europe before coming to our country. One advantage this has is that it gave us time to prepare.
Preparation is key to most of the challenges in life. This is why you need a dependable emergency fund in your arsenal. This fund is not something you just save for in a few weeks. It takes quite some time to build it up. That is why you often hear financial experts talking about the importance of having a rainy day fund.
Your fund might be in an envelope somewhere in the house or deposited in a high-yield savings account. The money might even be in an investment account in hopes of beefing it up. Now is the time to get it and use it. Be cautious though because you might feel complacent knowing you have the money to survive. No one knows when this will end. It is best to try and stretch your emergency fund for as long as possible.
Sell investments to raise immediate cash
One of the places to look into when you need to raise some money is letting go and selling investments. This is one area where you can get some financial support during this time. But you need to remember one of the timeless lessons when it comes to investments. It is something taught by no other than Warren Buffet. He basically says that how you need to take this opportunity to invest when everyone else is fearful.
The problem lies with your ability to increase your investments. As much as you want to secure your future, your present needs take precedence. If you find yourself dipping into your investments, you can sell some fixed income holdings, if you have any. These are investment instruments offered by companies in order to raise capital.
Of course, you can look at other investments you have to raise the money you need. Just know that there is a chance you are selling at a loss. This can set you back with your long-term goals. It is a balancing act with how much you sell and how many you keep. Remember that you still need to plan for life after this pandemic.
A HELOC can be a form of financial support
One of the most sought-after sources of money Americans are considering is tapping into their Home Equity Line of Credit or HELOC. Forbes shares that flexibility HELOC offers is helpful during these times. This is basically borrowing money from the amount you have paid on your mortgage loan. Safe to say, this does not apply to people who are renting. If you want to take out a HELOC, you need to start talking to your lender as soon as possible.
This is because a lot of homeowners are trying to access HELOC that some lenders are overwhelmed with applications. A lot of them are starting to be cautious with so many applications. They could be starting to limit and even restrict applications. If you wait too long, you might have a difficult time getting that money.
Just know that if you choose to get a HELOC, you are stretching your house payments over a longer period of time. The longer your house payment is, the more your home is at risk. Your lender will have a lien over your property. If you encounter another big emergency in the future and unable to pay your mortgage, you can lose your house. So carefully weigh the pros and cons before getting a HELOC.
Savings you have set aside
Financial support can also come from the different types of savings you have at this point. Apart from your emergency fund, you could be saving for a lot of different goals in life. One is your retirement. There is a good chance that you have a 401k account for your golden years. Normally, you could get fined for taking money out too early. However, under the CARES Act, there is a little more leeway in dipping into your 401k.
Are you also saving for a downpayment on a new car? That could take the backseat in light of the pandemic. Instead, you can use the money and put it in your emergency fund. This bolsters your fund and allows you to stretch your money. This gives you financial coverage over a longer period of time. It allows you to look for ways to augment your finances while staying at home.
The idea is to pool in money from different savings into your emergency fund. Again, this is a balancing act where you need not take everything out. It is still important to plan for life after this pandemic is over. You need to have your finances intact to help you navigate through the new normal in society.
Financial support can come from many places in times like this. You just need to make sure that you have an idea of what your options are. At times like this, you can quickly get overwhelmed with everything that is happening. A lot of people getting sick and hospitals at full capacity. Economies tested and businesses are struggling. In all these, knowing how you can augment your finances can help you feel at ease.