Is coronavirus infecting your financial health?
Updated: May 7, 2020
The short answer is: more than likely, yes - and if you are not already being affected, you will likely feel its effects in the near future.
This week the World Health Organization declared coronavirus a.k.a COVID-19 as a global pandemic, and President Trump has declared a state of National Emergency in the US.
In addition to the rising death tolls and shut-downs happening across the world, there also lies critical implications for the health of local and global economies. Which of course trickles down to impact the financial health of individuals like you and me.
Here are a few ways that the coronavirus is impacting your financial landscape in critical ways.
The Local Economy
COVID-19 is not only endangering people’s physical health but also their financial health. It is definitely infecting our local business owners’ finances. As people opt to stay home (as they should during a pandemic) it means the entire economy will slow down. Without customers and patrons, there is no income for businesses. Which means they also output less spending, which then results in an overall declining economy.
This will, and already is, affecting people's well-being financially.
In terms of employment, as big businesses shut down offices and storefronts, employers who are sending people home, may also deduct their pay. With the exception of a few industries (like healthcare) it means less opportunities for people who are needing jobs.
Schools closing means our education system’s role in the economy is also being affected. Along with teachers’ incomes becoming affected, so are the numbers of students graduating. This affects the job market in which positions may go unfilled that rely on fresh batches of graduates coming out of school.
The International Economy
Currently the international markets are failing because they can not engage in their regular trade of goods and services.
Products made in China, Italy, South Korea, and many other parts of Europe and Asia are facing huge quagmires in their production, import, and export lines.
Big business is being affected in huge ways, from oil companies to airlines. The price of oil has dipped (but it may sky rocket before long).
The Stock Market
Stock markets are plummeting. Which is exactly what happens during major epidemics. And they will likely continue to nose-dive until the fears and outbreaks are quelled.
Here are some implications for those of you with shares in the stock market.
Now is a terrible time to sell. If you already have stocks that have plummeted, hold onto them because the market has always recovered in the past after epidemics and pandemics.
It is also a great time to buy because stocks are cheaper now than they were before. A well-established, reliable company will likely bounce back.
For those of you who have a piece of your portfolio in fixed income, you can breathe a sigh of relief. You did good, this is why we have these portfolios. Because a fixed income portfolio will remain unaffected by the crash in markets and will continue to grow anyway.
Insurance policies will change and adjust according to the impact of COVID-19. However, given that we are still in the early stages of the virus taking hold here in the US, there are no specific policies in place as of yet around this particular virus. If you do not yet have life, health, or disability insurance, I recommend you get it as soon as possible - especially if you currently have a clean health record.
We don’t yet know how quickly the virus will get contained, how far it will spread, what the long-term implications will be for you if you do get it. If you do, this will change the cost or ability to get insurance if you do contract it.
If you have a clean bill of health, no matter what age you are, get health, life, and disability insurance now. If you contract the virus, I promise you will not be able to get the same kind of rates for insurance that you have access to now.
The reality is that as fatality rates go up, insurance goes up. Get ahead of it while you can.
A Note For Nurses
As the COVID-19 pandemic grows, extra positions will open up. You may be called into action more than you ever have before. As a flip to the economic decline that most people are facing, you and others in the medical industry will be facing an increase in demand.
Which for you could mean more money, more over-time shifts, and more potential for burn-out. Please make sure you are taking good care of yourself during this time, especially when you start to really feel the shortage.
If you find yourself working more and earning more, make sure you put this money into your savings. As you can see, situations can shift drastically in a short period of time. There may come an emergency situation that comes your way that changes everything in a moment's notice - virus or no virus.
This is merely a wakeup call for us to realize what we should already have in place.
Keep in mind that things will change when things start clearing up. Right now, hospital systems are making big profits. And as a nurse, you have a pretty high chance of contracting the virus. If you do, as I said it will really affect your ability to get insurance, and the costs will not be very affordable.
Make sure that you don’t touch your 401K or 403B. Yes the markets have crashed, so yes you’ve lost money. But don’t panic. Just leave it in there because the markets will recover over time. They always do.
Self-care for your physical, mental, and financial health
What is most important now is also taking care of your own health as well as those who need your help. Stress and panic will only do harm to your body’s immune system, so stay grounded as you feel the tides swelling.
Take time to intentionally de-stress your mind, and restore your body.
In terms of your finances, be vigilant about saving your money - especially now. This is not the time to spend frivolously, conserve as much as you can, and put your money into savings as much as possible.
Stay safe out there! If you need help with making sure you are making the best financial decisions during this critical period. Book a virtual meeting with me here, I am here to help.