Most economists and news reports are predicting a recession due to the COVID-19 pandemic. It’s easy to feel helpless when tough times are looming, but we have three ways you can get prepared.
- Wrangle Your Debt
Easier said than done, right? Thanks to the Federal Reserve cutting interest rates, putting a dent in your debt might be simpler than you think.
- Credit Cards – Chances are your cards are getting used a lot these days. That makes now the perfect time to shop for a lower-rate card or one that lets you transfer balances for 0% APR. WWFCU’s Visa Rewards cards have low rates and 0% APR for the first six months.
- Refinancing – From personal and auto loans to mortgages, lower interest rates can mean major savings when you refinance. For mortgages, a good rule-of-thumb is to refinance if the current rate is 0.5% to 1% lower than your mortgage interest rate.
- Student Loans – Have federal or private student loans? It might be time to take a look at those as well. Private student loans can be refinanced. If you have federal student loans, you may be able to defer them. Also, the U.S. government has waived interest on federal student loans which means any payments you make will go entirely toward the principal of the loan.
- Keep Saving
Again, for many people this is next to impossible right now. But if you’re still earning a paycheck by working from home, now is the ideal time to sock some of your paycheck away.
- Extra Savings – Look at your past bank and credit card statements to determine how much you usually spend on gas and lunch each week. Since you’re obviously not driving much or eating out, you can put that money into your savings account.
- Automatic Savings – Make the savings automatic with your direct deposit or set up a recurring transaction that transfers money each pay period from your checking to your savings.
- Budget Time – With some of your extra downtime, pull those statements out again and create a realistic budget moving forward, including when you’re no longer required to stay at home. Shave some expenses like lunch costs, etc. to bring your budget down.
- Be Patient
Have you taken a peek at your investments lately? Probably not the best news. But don’t panic and withdraw all your money. One, that could lead to a lot of penalty fees. Two, patience will pay off. As dire as the stock market and retirement accounts seems right now, they will all eventually balance out. Think back to the burst tech and housing bubbles over the past few decades. Investment accounts have always bounced back. Be patient and wait for the storm to pass.
Need help or have questions? Contact a WWFCU Member Service Representative at (734)721-5700.