The coronavirus has abruptly changed the financial landscape for many of us. The future is still unclear, and this kind of financial uncertainty can be stressful to navigate.
During this difficult time, Valley Credit Union is offering COVID-19 member assistance services and loan options with no credit check and a fixed low rate. To learn more about our Lifeline Loan, skip to the bottom of this post or click here.
For advice on personal financial planning during uncertain times, keep reading.
Recognize what you can control and what you can’t
Unfortunately, none of us can control what happens in the future. We can’t control:
- The direction of the economy
- Unexpected changes to our income and investments
We can control what we do now to guard against uncertainty by doing the following:
- Build up an emergency fund, if you are able
- Be smart about your investments, if you choose to invest
- Anytime you take out a loan during financially uncertain times, choose one with good terms
Emergency financial planning: saving vs. investing
People often want to know where to put money during a recession, and how to prepare for a recession when you are worried one is coming. Unfortunately, there is no universal answer. The right approach depends on your current financial situation, and specifically, whether or not you have savings.
How to Save
Having an emergency fund is helpful no matter what the economy looks like, but it’s especially important during times of uncertainty. How much you put in your emergency fund will depend on your cash flow, but a good rule of thumb is to save enough so that you would be able to go a few months without income if you had to. Emergency funds should be in low-risk, easily accessible accounts, such as a savings account. A credit union is a great place for an emergency fund because credit unions are typically federally insured, local, and available when you have questions or need help.
When to Invest
Once you have an established emergency fund, it gives you the freedom and peace of mind to use other money to take on higher-risk investments with high potential rewards. A recession can actually be a smart time to invest, because asset prices are often low. To minimize risk, invest gradually, and be prepared that prices may continue to fall after you invest. Be ready to wait it out.
Set a monthly budget
During times of financial uncertainty, some people are hit harder than others. If your income has recently decreased, there are several steps you can take to protect yourself. Regardless of your situation, planning and tracking what you spend can help. If you haven’t already done so, start by making an itemized list of everything you spend in a typical month. Don’t forget to include automatic payments, such as subscription services, phone bills, and insurance premiums.
If you recently lost income or you want to start saving up your emergency fund, you might find there are places you can start spending less. For example:
- Are some of the foods you buy cheaper in bulk?
- Have you barely used that steaming service since you signed up?
- Do you have Wi-Fi at home? You may not need unlimited mobile data.
Remember, these changes don’t have to be permanent. It’s just until you get to a financial position you are comfortable with.
Need a loan? Choose the right one
When applying for a loan during financial uncertainty, it’s important to choose one with terms that are reasonable and forgiving.
One of the reasons people love credit unions during financial crises is that credit unions are often able to offer superior loan terms to their members. Another reason is that credit unions focus on offering more personal and empathetic service. We treat our members as individuals, not numbers.
Apply for a Lifeline Loan from Valley Credit Union
Our Lifeline Loan is designed to ease stress and provide financial stability during difficult and uncertain times.
- The maximum amount you can be approved for is equal to your monthly direct deposit into your account, up to $1,500.
- No credit check or underwriting required.
- You must currently be in good standing and have been a part of the Valley Credit Union family for more than 12 months.
- Maximum loan term of 12 months.
- Current rate: 10% fixed APR.
- No origination fees or prepayment penalties.
- We process applications quickly, often with same-day approval.
Salem is our community and we have been around since 1957. Contact us today to learn more about Lifeline Loans, other financial services, and how becoming a Valley CU member can help you navigate uncertainty and plan for a bright financial future.