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Personal Finance and the COVID-19 Coronavirus

Personal Finance and the COVID-19 Coronavirus
Personal finance and the COVID-19 Coronavirus are become important topics. Prepare and keep your finances on track!


COVID-19 is a real wake up call for how we should be managing our finances. Aside from the health impacts, COVID-19 may result in real financial hardship for many. Quarantines, school closures, and lockdowns could result in lost time at work and reduced incomes. In the bigger picture, employers may be forced to lay off workers and reduce staff. So far, the media has focused mainly on supply chain disruption, but demand for products and services may slump soon too. Lower demand and consumption through reduced human activity ultimately means fewer jobs, corporate losses instead of corporate profits, and less tax revenue for governments. Though we haven’t had a recession in a long time, the “R” word is now being thrown around.

All of this has gotten me thinking that personal finance and the COVID-19 Coronavirus are quickly becoming important topics. It also got me wondering – “How prepared am I for a potential quarantine or recession? And how should my partner and I be preparing – including our finances?”

Below are a few steps we have recently taken to tighten up our finances.

Reviewed our budget and spending:

My partner and I always track our spending and budget, but we thought it was a good idea to review our budget again now just in case. In doing so, we adjusted how much we anticipate spending on certain items. For example, we reduced what we had planned to spend on vacation this year, but slightly increased what we planned to spend on groceries and consumer staples. Though we are not hoarding toilet paper, we have added to our pantry a little bit (in the form of non-perishables that we know we will eat in any case).

If you’re new to budgeting or you don’t track your spending, you can check out these two articles on the topics – Tracking My Spending and Building a Budget. You can also download the budgeting template we use ourselves here on my Free Financial Resources page.

Increased our cash on hand:

I am also a big believer in having cash on hand (you can read about the funny and frustrating reasons that I do so over here). Last week when I was at the bank, I decided to take out a little more than normal. I generally withdraw a few hundred dollars to have on hand each quarter, but this time I thought a little bit more wouldn’t hurt. I also double-checked our emergency kit and made sure that some extra cash was stashed there as well.

Double checked our emergency fund:

Speaking of our emergency kit, we double checked our emergency fund too. A lot of people ask me, “How big should an emergency fund be?” There isn’t really a hard rule for how much money should be in an emergency fund – it comes down to what you’re comfortable with. Some people are happy with a fund that covers three months’ worth of regular expenses; other people may want to cover six months, or even a year or more. Personally, I like about a year’s worth tucked away. Nevertheless, it’s ultimately up to you – even a small amount of savings in case of emergency is better than nothing.

Check out my post on Having an Emergency Fund to learn the what, where, why, when, and how of building an emergency fund.

Reviewed our debts and credit cards:

Debt is another important financial consideration for most people. Recently, we reviewed our credit cards, made sure automatic full balance payments were in place, and double checked our lines of credit to make sure we didn’t have funds drawn on them.

If you do have credit card debt, a line of credit open, or student loans consider paying them off. If achieving debt freedom is not a near-term possibility for you it may still be worth talking to your bank and trying to reduce your interest rate – even a small interest rate cut could save you big money. If that isn’t possible either and you’re stuck with many debts, typically it makes sense to pay off high interest debt first before moving on to lower cost debt.

The Bank of Canada and the US Federal Reserve recently reduced interest rates in response to the Coronavirus. Both countries now have a benchmark interest rate of 1.25%, versus 1.75% at the start of the year. While this interest rate cut wouldn’t entice me to go out and buy a home, and rates could still fall further, I would be looking into refinancing existing mortgage debt to take advantage of these lower borrowing costs.

Reflected on our employment situation:

My partner and I are fortunate in this situation, given that we both work from home already and don’t often need to travel for work – but this is not the case for most people. If I worked in an office and was worried about getting sick or needing to self-isolate, I would be double-checking my sick days, vacation days, and personal days. If applicable, I would be reconsidering my work-related travel as well. Some work trips may be necessary, but many are not.

Organizing childcare and adjusting work schedules around your children are also important challenges to consider, especially if schools, daycares, and/or other public facilities may close in the future. Even if unlikely, it’s worth taking some time to think about possible options so that you’re not caught off guard down the road.

If we do enter a recession, it’s very possible that layoffs will occur. No one wants to lose their job, or worse yet, to try to find a new job when a ton of other people are also competing for limited openings. To increase the odds of staying employed, work hard (obviously), look for ways to increase your value in the eyes of your employer, and wait for good times to re-emerge before asking for that big raise (that’s my strategy anyways!).

Reviewed our investment portfolio:

I reviewed our portfolio as well. For full disclosure, portfolio management is what I do for a living, so it’s something I am always focused on. Nevertheless, when markets and economic conditions change, it’s important to reflect and ask yourself the following: How diversified am I? When do I need my money back? What is my risk profile? How much pain can I take? Am I prepared to take advantage of opportunities?

Whatever you choose to do, make sure your investments let you sleep at night. It’s important to adopt a strategy that fits your risk tolerance, personality, and temperament. If your investments are currently making you uncomfortable, it is possible you should never have been in those investments to begin with. Although there is plenty of current media on the recent stock market performance and COVID-19, this YouTube video provides a concise summary.  

As a final point, panic is often counterproductive – especially in investing. The world’s best athletes, business leaders, and investors don’t panic when they’re down, and they weren’t made champions by panicking in the face of challenges. Concern, preparation, and adaptation are rational, but panic is not.

Final thoughts:

COVID-19 is a real wake-up call for how we should be managing our finances. Personal finance and the COVID-19 Coronavirus are quickly become important topics. Planning, organization, and adaptation are key ingredients to financial success, and the Coronavirus is a good reminder of this. If you’re interested in more things personal finance, check out my keystone post Seven Financial Rules I Live By, and subscribe to receive more personal finance content in the future.

Thank you for reading! I hope this article helps keep your finances on track! Remember to wash your hands, don’t panic, and, as always – hope for the best, but prepare for the worst.


Please keep in mind I am not a financial advisor and the opinions expressed are my own. My Money Moves does not provide financial advice – it is an informational website that details my own approach to my own money and personal finances. If you need specific financial help or guidance, please do your own research and seek out a professional who can work with you to reach your goals.

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4 thoughts on “Personal Finance and the COVID-19 Coronavirus

  1. Thank you for this article, it’s to good to know the precautions you are taking and to know what and where you are expecting to see higher and lower expenses for the year.
    We are naive investors so it’s good to know what the experienced investors are thinking.

  2. Thank you for reading and commenting Ruchu. I also expect expenses for various entertainment items like eating out and sports venues may fall too, especially if bans are put in place on more and more large events.

  3. It’s like I’m checking off all the same boxes as I read through the article. Great summary and lots of important planning ideas for people to consider. We have seen discretionary spending fall in our budgets miscellaneous category with no recreational or kids activities. Also a big drop in transportation expenses. Unfortunately reduced income on the other side.

    Thanks for your list, a welcome reminder for everyone!

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