At some point in the near future, the Coronavirus pandemic will officially be declared over. We are already seeing massive drops in the number of new worldwide cases and deaths. While the threat of a possible second wave remains imminent, the arrival of a vaccine before the end of the year should be enough to prepare us for a brighter, fresher 2021.
It won’t be easy, either for businesses, or for individuals, but an economic recovery will occur in the midst of this extremely unique recession we’re currently facing. The next two years will be a balancing act between caution, and optimism. If you took a financial hit from Covid-19 during the pandemic, then you’ll probably err more on the side of caution. If you weathered the storm, you could lean more towards optimism. Regardless, you shouldn’t have one without the other.
Here’s some tips for handling your wealth after the Coronavirus pandemic has ended. With a little strategy, planning and a clean balance sheet, you can keep your financial health in good shape, while preparing for a better tomorrow.
#5) Spending Helps Everyone
Uncertainty plagues the current economic market in North America, but all hope is not lost. Far from it, in fact. A recent jobs report found that unemployment forecasts were not nearly as bad as predicted, with a surprising uptick in the amount of jobs recovered in the United States. Hopefully this has a trickle-up effect into the Canadian market, as well. In the meantime, it’s important to resist the temptation to horde all your money for a rainy day…or another pandemic. Instead, spending some money can go a long way towards stimulating a bruised economy, and will help create market confidence. Naturally, this tip is dependent largely on your current financial situation, but refusing to order out for pizza because you’re worried about tomorrow might be the wrong play.
#4) Know Your Limits
Few of us have neglected to check our current savings and income, while measuring it against our bills. Thankfully, that means most of us are in a position to predict how far out on a spending limb we can go, before the branch snaps. Knowing these limits is key to riding out the tail end of the Coronavirus storm, and out into the sunlight. Even if you’re back at work and the paychecks are rolling in, exercise some restraint. Until the road has been cleared of large rocks, it’s best not to stay mildly frugal, lest you succumb to a bumpy ride! Avoid splurging on things you don’t need, and try to maintain the discipline you’ve developed for yourself during the lockdown period, at least for a few months. As things open up more, relax the belt a bit.
#3) Avoid Large Purchases
It may be tempting to take advantage of post-Covid recovery sales and hot deals, but be mindful of what you’re willing to spend money on. Buying a new car on the back of a major economic crisis might be too much of a financial risk. Again, this will depend largely on your current financial situation, but biting off more than you can chew while the ground has not fully stabilized could be a major misstep in your financial goals. Similarly, those interested in buying a new house (especially in a market still in high demand) could be troublesome. The objective here is not to wait forever before moving forward on a large purchase, but rather to tiptoe through the next few months (or perhaps the end of the year) to be sure that the dust has settled. In doing so, you could set yourself up to take advantage of the slow winter period which tends to have an adverse effect on car and housing sales.
#2) Invest In Stocks, Rather Than Startups
If you have the money to do a little investing, make sure you’re putting it in risk-adverse sectors, such as the stock market. Now’s the time to take advantage of stocks that may have taken a hit, but are not down for the count. The returns could end up being substantial, even over the course of the next decade. Alternatively, avoid investing in startups during such a rocky period. While new opportunities will undoubtedly emerge as the economy recovers, it is doubtful that market confidence will produce a huge influx of ambitious young entrepreneurs waiting to stake their claim. Be wary of any who do, and be sure to check their financials, their business plan, and their references.
#1) Ditch Credit Cards For A Line Of Credit
If the fallout of Coronavirus has taken a bite out of your financial goals to the point where you have to adjust your planning over the next several years, make sure to choose the right options to bounce back. Credit Cards are easily available if you need to defer payments and pay bills, but they’re a long-term trap that can deal out immense financial damage in the form of interest charges. It’s usually a better idea to put the Credit Cards on ice during a tight financial period, and instead take out a line of credit, which is more flexible and advantageous. With attractive fixed and variable rates, plus a healthy amount of available credit, you can consolidate many bills and expenses at once, thereby reducing multiple interest payments, while focusing on one bill instead of several. Having a line of credit with a consistently on-time payment history (and eventually a $0.00 balance) also does wonders for a person’s credit score!
Once more, the key to handling your financial wealth after Coronavirus ends lies in keeping an eye on the markets, staying cautious, but also treating yourself for being so responsible with your money while the pandemic hit its height. Don’t be afraid to relax, but keep an eye out, and an ear to the ground, especially when it comes to your balance sheet. If you do, you’ll maintain your financial well-being, and become even better prepared for the light at the end of the tunnel.
For more information on how to handle and grow your wealth both during and after Coronavirus, get in touch with us today!