COVID-19 economic reality: Lyle Advisers offers these financial tips

In these times of severe economic uncertainty caused by COVID-19, it is even more important to practice good habits that can keep you financially afloat. While many factors may be out of our control, there are concrete steps that many people can take to ensure that their money and their livelihoods are protected. Noelle Neff, graduate journalism student and finance writer for Lyle Advisors has spent the past few years exploring how a foundation of healthy money habits can prepare American families to weather any financial storm. Noelle shares the following tips to help keep track of your spending and take care of your money during an economic downturn.

Examining Economic Conditions
One of the most important things that people can do to enhance their financial health is to pay close attention to economic conditions. Keeping track of important economic indicators like the stock market, unemployment rate, and interest rates can help you make educated decisions about your own financial situation.

Automatic Savings
One healthy financial habit is taking savings automatically from your checking account. If you never see the money in your checking account, you are far less likely to spend it. You will also quickly learn to budget around it.

Track Your Spending
It is a great idea to start keeping track of what you spend and why. You may find that some of the items you spend money on are not necessary. It may help to start small by applying this focus to your grocery shopping. In the rush to stock up on essentials during the Coronavirus scare, pay special attention to how many of your “essential” items are actually accounting for the bulk of your expense.

Think about such items as premium cable channels and subscriptions that you are not using. You can also cut down on going out to eat, buying new clothes, and entertainment expenses. Simply packing your lunch for work can save you hundreds of dollars per year.

Negotiate Interest Rates
If your home is mortgaged, you may want to look into refinancing it. Today’s economic conditions include rate cuts from the Federal Reserve Bank. While these do not affect homeowners with existing fixed-rate mortgages, they can benefit adjustable-rate mortgage holders and those who wish to refinance.

Depending on your credit rating and ratio of credit used, you may also be able to negotiate your interest rates with credit card companies. It doesn’t hurt to ask, and you may find that they are willing to work with you. Companies like Lyle Advisors exist to help navigate this process.

Taking Stock of Your Holdings
It is a good time to make sure that your retirement holdings are in good shape. If you have an individually managed portfolio and are in line for retirement within the next 10 years, it may be a good time to put money in bonds rather than stocks. Unfortunately, many retirees have lost a significant amount of money this winter with the stock market difficulties caused by COVID-19.

Delay Large Purchases
You may find that you can live without that new car or new refrigerator. When you buy a new car, you may be surprised to hear that it will depreciate by as much as 10 percent when you drive it off the lot. A reliable used car is a better choice if you are trying to save money.

Budget Carefully
You will spend less money overall if you keep yourself on a strict budget. Each month, budget money for utilities, rent or a mortgage payment, food, entertainment, children’s schooling, and activities, and any consumer goods you need to buy like clothing. When you stick to a budget, you will be more likely to think carefully about each purchase you make. You will be more likely to retain your financial health if you keep your spending under control.

Find Free Ways to Have Fun
Your discretionary budget may be expensive. When you consider the cost of event tickets, dinners out, movies, gym memberships, and cable subscriptions, the money can add up quickly. Instead, it is a good idea to find recreational activities that you can do for free.

Walking or running outside are beneficial activities that anyone can do. Finding free TV options like over-the-air antennas can help you save money on cable, as can getting DVDs from your local library. Options may be limited by Coronavirus concerns, but many free options are still available.

Challenging Times
COVID-19 has put an incredible amount of stress on the world’s financial situation. It may be that some of these money-saving tips do not apply today in your current situation. In this case, try to lock down your budget as much as possible and prioritize your spending. If you have to spend money, make sure that you are getting the best possible deal and that you are not spending money on things that will wear out or expire quickly.

When you are considering which tips make the most sense for you, remember that everyone has a different financial situation, especially today. Take care to spend wisely and rein in your budget whenever possible.


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