How the Coronavirus Can Impact Your Finances
In the United States, the coronavirus has had a significant impact on people over the last few weeks. From grocery store shortages to sparking a potential recession, the coronavirus has affected people in many ways other than health concerns. One of the most prominent impacts of the coronavirus is the economic downturn it has caused. Many people are dealing with financial challenges today because of this current virus. In this article, we are going to discuss some of the ways the coronavirus can impact your finances.
A Decrease in Stock Values
As you may know, the coronavirus has had a significant impact on the stock exchange. Unfortunately, many business’ stocks are suffering from significant decreases in value. While this can be positive for those who have not invested in the stock market, it has a significant impact on many stockholders. If you do own any stocks, they have likely seen a decrease in value. This means that if you were to sell them now, you would likely lose money or make less money back on the stock than you would have before the recent market declines. However, it is expected that the economy will stabilize once again, which should increase the value of stocks.
The Federal Reserve Interest Rate Cut
Another impact the coronavirus has had on American’s finances is the amount they earn in interest from their savings accounts. The Federal Reserve recently enacted an emergency rate cut that was done in reaction to the coronavirus’ effect on the economy. Unfortunately, this means people will be earning much less in interest with their savings accounts, especially those who have high-interest rate savings accounts.
The Desire to Save More Money
As soon as the coronavirus started to spread in the United States, many people started taking measures to help ensure they would be financially secure if they lost their jobs or had their work hours reduced. This resulted in a substantial number of people deciding to put more money in their emergency fund. This is not a negative financial impact, as having more money in your emergency fund is always positive. However, this does appear to have a negative impact on the economy, as people are spending less on non-essential items and are putting their money towards savings. But, it is always recommended to have at least three months’ worth of expenses in your emergency fund in case a financial crisis does happen.
If you are concerned about your finances in the current financial environment, please feel free to contact one of our financial professionals. Our team is highly trained in investments and in finding ways for clients to save their money when income is limited or when the economy is unstable. Please feel free to contact us if you would like advice on your finances during this difficult time. We hope you and your family are staying safe and healthy by staying home.