The outbreak of COVID-19 and its impact on our economy has forced many to take a closer look at their financial situation.
Regardless of where you are in your financial life, here are a few things you can do during the COVID-19 crisis to help set yourself up for financial success in the future.
- Talk with your partner: Have the hard conversation with your partner or family about your overall financial situation. The more transparent you can be with one another, the easier it becomes to stay aligned with where funds are being allocated as things continue to unfold. At a time when tension and panic are particularly high, it’s a great initial step to mitigating added strain to an already stressful situation.
- Get in the driver’s seat: You are in control of your financial future – nobody can or will do it for you. Although this may feel daunting at first, there are many ways to take a proactive approach in managing your money. Start by assessing your situation: make sure you know how much money is coming in, how much is going out, and how much you have in savings. With a full picture of what you have available, you can prioritize spending more effectively.
- Create a budget. Get specific with your budgets. Once you confirm how much money you have coming in and what your monthly expenses are, it’s time to get more specific. Make a list of all the things you need to budget for, then allot a specific money amount to each area. This is a place where technology can help. Put Penn Community Bank’s financial management solutions to use. They can show trends over time and help make the budgeting process easier to keep up with, so you can stay on track. Also, as the government provides a stimulus package relief plan, make sure you’re allocating that extra money in the most impactful areas.
- Bulk up your savings. Aim to have 3-6 months of expenses in savings. You can do this by saving on things you no longer need to spend on. With social-distancing in effect, you may see some weekly and monthly expenses dropping. For example, maybe you’re finding that you now use less gas, or that your daycare bill has dropped to zero, put as much of that extra money into savings as you can.
- Avoid unnecessary expenses. Once you create specific budgets that help you understand exactly where your money is going, and you’ve found ways to reallocate more into savings, it’s time to cut unnecessary expenses. Maybe this is in the form of a subscription that you haven’t used in a while. With subscription tracking software you can easily find which subscriptions you have, so know exactly what you’re paying, and more importantly, where you can save month-over-month. Or, perhaps, it’s a luxury item you’re accustomed to but can do without for a few months. Either way, these recurring expenses can add up fast.
- Minimize the cost of debt. Now’s a good time to get out of debt if you can. Interest rates are at a historic low—use that to your advantage. Check in Penn Community Bank about debt consolidation loan options and, if possible, roll everything into a single, low-interest loan.
- Defer payments. Use what’s working in your favor. Many organizations from banks and mortgage companies to lenders and utilities are holding off on late fees and/or deferring payments. Check in with each one of your providers to see what they’re offering. This will give you a much clearer picture of how to reallocate that spend and continue to build on your savings.
- If possible, help the economy and your community. This is a hard time for everyone, but it’s also a great opportunity to lean in and help where you can. One way of doing this is by shopping locally. If you have available funds, help local businesses that may be struggling during the economic downturn. Another way is by helping your community, whether that’s by giving blood, or supporting regional food banks. Always look to “pay it forward.”
To help you accomplish your financial goals, Penn Community Bank offers all online banking customers access to the award-winning financial management platform MX Money Management.
Created by financial data analytics firm MX, this free software platform harnesses the power of data to help people make better financial decisions. It eliminates the need for spreadsheets and simplifies your financial life. No more juggling paper statements or logging into several accounts at multiple financial institutions.
With MX Money, you can:
- Connect all your financial accounts in one place, including credit cards, loans or accounts with other financial institutions, and even investment accounts.
- Track and categorize your spending, so you can clearly see where your money is going every month.
- Auto-generate a budget based on prior spending, which you can then fine-tune each month.
- Forecast debt payoff, using traditional or “debt snowball” methods. Calculate how quickly you can become debt free and how much you can save by snowballing debt payments.
- Anticipate future cash flow by populating a chart or a calendar with upcoming bill payments, paychecks, and more.
- Set financial goals on a timeline, including paying off individual debts; saving for an emergency fund, college tuition, or a new car; and saving for retirement.
- Analyze and then track over time your net worth, which is the total value of everything you own minus everything you owe; net worth is the single most important indicator of overall financial health.
Whatever your goal, MX Money Management gives you the tools you need to accomplish it. Simply log into your online banking portal and click on “Money Management,” found under “Manage Money” in the top navigation bar. To access MX Money Management via our Mobile App simply click on the “More” menu.
To learn more or for questions about MX Money Management, call the Penn Community Bank Customer Care Center at 215.788.1234.