Being cooped up at home has made me both obsessed with planning and very bad at it. I stare at the four walls of my apartment and spend absurd amounts of time thinking about dinner. Is the chicken defrosting? I check the fridge again. I make lists of things to buy with paychecks I’m not sure I’ll get. I look at my in-box. I look at my phone. I look at my bank account. How is it so low?! Oh, right — groceries. Enough to last us for weeks … I think? Both time and money feel so abstract right now, and bizarrely hard to keep track of, even though my days and expenses are simpler than they’ve ever been.
Desperate for concrete, actionable advice, I’ve been asking financial experts whether there is a “good” money plan to be made as we sit at home, taking our temperatures and steeling ourselves for a recession. But it feels almost obscene to talk about things like 401(k)’s while millions of people have lost their jobs (and some — scariest of all — have been too sick to work). Still, the general consensus is to focus on what you can control, even if it’s very little. With that in mind, I hope that these small, immediate steps will be helpful.
Think of the worst that could happen.
This sounded counterintuitive at first, but talking yourself through the chain of disaster scenarios can make you realize that you’ll actually be okay, says Brad Klontz, a psychologist and financial planner. “There’s a technique in psychology called exposure therapy, and this is similar: I don’t avoid thinking about the worst that could happen. I dive into it instead. The trick is to keep asking yourself, ‘And then, what would I do?’ Follow that trail.”
He gave this example: “If I lose my job, then what would happen? I wouldn’t be able to pay my rent. And then what would happen? I’d have to go live with a sibling or another family member or a friend. And that would certainly be a huge blow, and no one wants that, but it wouldn’t be the end of the world. I’d be able to get back on my feet eventually.”
Not only do these worry wormholes help you see the safety nets in your life, but they can also be practical. “Working your way through these fears allows you to come up with plans, and that helps dispel anxiety, too,” says Klontz.
Take stock of what you have.
“This is a great time to take a look at your spending,” says Manisha Thakor, the vice-president of financial well-being at wealth-management firm Brighton Jones. “Being forced to sit at home helps us evaluate what we actually miss from our normal lives, and what we maybe didn’t need to be spending so much on after all.”
She also recommends taking inventory of what you own, possession-wise. “This is a great opportunity to Marie Kondo your closets, which will make you feel grateful for what you have,” she says. You might even stumble upon a forgotten gold mine. When my husband was cleaning out an old box the other night, he discovered — no joke — a full bottle of hand sanitizer and a box of wet wipes! It was like the coronavirus version of finding a $100 bill in the pocket of old jeans.
Don’t let yourself get panicked about the market. Remember that it recovers.
I hadn’t checked on my 401(k) in almost a year, entirely out of laziness. But last week I figured I’d take a gander, just to see the damage. It was bad. I felt like I should take action of some kind. And then Sallie Krawcheck, the founder of Ellevest, an online financial-planning platform, came to my rescue.
“Do not look at your 401(k) if you can avoid it,” she told me. “It’s just going to be upsetting, and you’re going to have an overwhelming urge to do something about it. But any action you take has a very good chance of being exactly the wrong action at exactly the wrong time.”
What to do instead? “I keep reminding myself that the economy has recovered from every recession and depression in history,” she says. “It may not bounce back quickly, but it does bounce back. And in the meantime, let’s spend less. Let’s not look at our investment portfolios. Let’s not torture ourselves. We’ve been in scary places before, and we’ve made it through.”
Lean into your side hustles.
Yes, this is annoying advice for anyone who didn’t see the need (understandably!) to have more than one job before now. But if you have extra skill sets, brainstorm ways to cultivate and monetize them. Make a personal website. Spruce up your résumé. See if you can take a free class online. “Multiple streams of income is always a great idea,” says Klontz. “You may not be able to make money off them right now, but when the economy starts to recover, you’ll have extra tools at your disposal.”
Thakor also recommends pumping your professional network. “Reach out to people you’ve been meaning to check in with, and see how they’re doing and what they need,” she says. “Everyone is craving connection right now. Staying fresh in people’s minds won’t get you extra work immediately, but it could plant seeds that come to fruition down the road.”
Take the extra time to pay your taxes.
Of the many things that the federal government has done to try to stimulate the economy lately, pushing tax day from April to July didn’t seem that helpful to me — I still have to pay the IRS eventually, so what’s the point in prolonging the inevitable? But Klontz said he’s going to take all the extra time he can get. “Not having to pay my income taxes just yet means that I have more cash on hand, which gives me more peace of mind,” he says. “For now, it’s one less thing to think about, financially.” If you wanted permission to procrastinate, here it is.
(Note: If you’re expecting a tax return, then it still makes sense to file as soon as possible. But if you’re not, you might as well sit tight for now. And remember, most people still owe state taxes by April 15 — the delay only applies to federal taxes.)
Consider getting professional help.
If you’ve never worked with a financial adviser before, try looking for one on XY Planning Network, a directory of fee-only financial planners who can meet with you virtually. Some of its members are offering emergency advice for free if you’ve lost income because of the coronavirus. For more specific questions, try Ellevest, which is currently holding “office hours” online, open and free to anyone.
Remember that in one way or another, this is happening to everyone else, too.
Every expert I spoke to said some version of the same thing: No matter how screwed you feel right now, there are millions of other Americans going through something similar. It’s hard to stay positive when you’re stuck in an apartment that you can’t even afford anymore, rationing soap and a dwindling wine supply, cursing every cent you didn’t save. But try to take it day by day, and don’t beat yourself up for not preparing better. “The best we can do is try to keep doing what we’ve always done — spend less, save more, pay down credit-card debt as quickly as possible,” says Krawcheck. “The rules haven’t changed. And none of us are alone in this.”