coronavirus money plan

Money in the Time of Coronavirus

The money world is all a flutter between the news of coronavirus, the stock market, oil prices and what governments are (and aren’t) doing. And as your trusty money nerd, I wanted to step in and explain a few things for you all, so that we can all get clear on what’s going on.

I know watching your investments fall can feel like a punch to the gut. I know it’s scary to see headlines about what’s going on with coronavirus. It feels both urgent and overwhelming to pay attention to all the news.

Money in the Time of Coronavirus

Here’s a breakdown of what’s going on in our world and a coronavirus money plan for YOU. (I’m not your financial advisor, and I’m not a seer, and I’m not a Wall Street investment pro, so this is just to the best of my knowledge!)

person counting money on the background with text Money in the Time of Coronavirus

The Coronavirus

Coronavirus has been making it’s way across the world, and badly hitting some countries while not even showing up in others. El Salvador? No coronavirus. Italy? On a total lockdown (no one in or out, and only *essential* business allowed to operate outside their homes.)

The virus is turning people into nervous Nellie’s in the US, and we’re seeing that play out in the markets. It’s caused the cancellations of SXSW, the NBA season, and LOTS of travel. This is because people are practicing ‘social distancing’ aka staying about 6 ft away from others to prevent the spread of the virus.

It’s still pretty early to say what the total effect of the coronavirus will be in the US and on our economy, but right now it has meant hundreds of millions lost in event, travel, and business revenue due to cancellations. (If you want a coronavirus money plan for your fam, keep reading!)

Oil Markets

Earlier this week, Saudi Arabia decided it wanted to have a big dick contest with Russia over oil. Saudi Arabia increased its oil production to 13 million barrels a day (eeek climate crisis), because it felt like Russia was making money that THEY could be making in the oil game.

Maybe you’ve heard of OPEC? It’s an organization that has a bunch of oil-rich countries in it, and they’re supposed to regulate oil prices and keep an eye on the oil supply. This move by Saudi Arabia has OPEC in high stress mode.

All of this, of course, effects the stock market at large.

Donald Freaking Trump

Last night Trump went on TV to talk about the government reaction to coronavirus. It was…not great. First of all, Trump (who has recently been in the same room as someone who tested positive for the virus!) had the sniffles on air, and second of all, he lied several times!

Trump said that he was stopping all travel from Europe (but not the UK???)- something that the EU says it hadn’t heard before last night.

Also, Trump said that health insurers “agreed to waive all copayments for coronavirus treatments.” ​But that’s not true- they will waive payments for TESTING, not for treatment.

Trump has repeatedly said we’ll have a vaccine soon, but exerts say that is at least 12 months away.

The US Stock Market

The market has been going down for about two weeks, with a few days of small rally’s. Thus far, the market has erased ALL the gains of the past 11 months, and as of 12:30pm CT, 3/12/20, the market is currently down.

We have entered what is called a bear market. THIS IS HELLA IMPORTANT; A BEAR MARKET IS NOT A RECESSION.

A bear market is when the stock market drops 20% or more FROM IT’S LAST HIGH.

Ok, stay with me now, because this shit matters: in both January and February, the stock market broke record highs. So the tuble we’re seeing now is coming from THE HIGHEST THE MARKET HAS EVER BEEN!

On February 12th, 2020 (that’s right, like 4 weeks ago!!!) the Dow Jones closed at 29,551.42. Literally the highest ever.

Today, as we enter this bear market, and I write to you from my humble abode, the market sits at 21,895.99

So YES, issa drop. But is it the world ending? No.

The stock market moves based on PEOPLE. (We cover this and more in our upcoming investing webinar!) If people get freaked out, the markets usually drop. Right now, people are feeling freaked due to all the stuff we talked about above, and that’s causing the market to go down. A big part of your coronavirus money plan is to not freak out too badly!

Your Coronavirus Money Plan

The biggest takeaway here is that the uncertainty in the world right now is causing fear, and fear causes the market to go down. Here’s what you can do to take control of your money right the hell now. Yes, I made you a coronavirus money plan!

1- Please, get yourself a budget ASAP. Understand where your money is coming from and where it’s going! Right now, the cutest thing you can do is get a good grasp of your financial picture, your assets, and create a budget that you can *actually* stick to. We’ve got a $20 budget workbook that is worth every penny and will help you get that control!

2- Check your savings. Right now, cash is king. You’re definitely going to want to have a 4 month emergency fund. This is why budgeting is so powerful; it helps you to hit other goals. I would prioritize this over trying to ‘buy stocks on sale’! If you have at least 4 months, you can turn your attention elsewhere.

3- Create a coronavirus plan. I am not predicting anything. But having a conversation with yourself, your family, or your work about what the plan is IF your life has to change is a great idea. If your kids schools close, is a parent going to have to stay home? Does your workplace offer telecommuting? Finding the answers to these questions NOW is a good idea.

4- Diversify your income. It might now seem like it on first glance, but now is a GREAT time to start your side hustle or own business. Creating another source of income can mean MORE income (awesome) and can lessen the blow if you are let go from your main job. You can read a few articles we have on freelancing and making that cheddar here*This especially matters to my small business boos!*

Oh and- wash your hands!

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