With a global pandemic affecting not only our daily lives but our source of revenue, many of us are in a state of distress. In a time of uncertainty, we are wondering and hoping for the best. While also trying to make sense of what’s to come. The Black Love team compiled a list of personal questions to help not only us but you too! We all feel a little lost thinking about the economic impact of COVID-19 and ways to navigate and plan accordingly in the event of a global recession.
We spoke with millennial money expert Tonya Rapley, who is known for her award-winning site My Fab Finance. She gave us some insight into the market, student loans, retirement, savings and investments, and much more. It doesn’t stop there! As a wife and mother to a 16-month-old, she has a lot on her plate. But Tonya is also launching a brand new series called Leveling Up in Uncertainty, which will provide educational tools and serve as an information source to help us thrive and come out of this on the other side.
Black Love: What areas of my finances can I take advantage of in a down market?
Tonya Rapley: If you are financially prepared for this down market, then it might be a good time to invest. I caution with might because it’s important to understand that even experts can’t predict the market perfectly. This won’t be a get in and get rich opportunity, but it could be an opportunity to start your portfolio and continue growing it as the economy rebounds.
It may be a chance for you to start or invest in a business that is going to be essential during this time. For example, medical supply companies and cleaning companies are going to be critical in the coming months. If you have the relationships or the capabilities, that might be a good option.
BL: What should we think about in terms of financial stability over the next month and six months from now?
TR: You should be thinking about savings and prioritization. Given that things are uncertain for your stability, it’s important to keep more than you think you need accessible. Emphasis on think, calculate how much your necessities cost each month, and then pad that amount and multiply it by four. By accessible I mean that it’s not tied up in investments, you can access it relatively quickly if you need it.
And then, prioritization. It might come down to you deciding which bills get paid first. Always make sure your shelter and nourishment are covered, followed by everything else. It might be time to cut back on the cable bill and other non-essential luxuries.
BL: Should I have cash at home? If so, how much?
TR: The good thing is that even at the height of the 2008 crisis, people were still able to access their cash. The money in your bank account is insured up to $250,000. As of 2020, no one has ever lost any money because of a bank failure. So, you don’t need to have your entire emergency savings in a vault at home.
But it is a good practice to have cash at home at all times. Absent of a recession, natural disasters happen as well. At a minimum, have $200, but the larger your family is, and the more your expenses are, the more you will need. A good baseline is $500-$1000. You’ll want to make sure you have enough for things such as gas for your vehicle, groceries, and medication. Also, make sure it’s in smaller bills, $5, $10, $20s because stores might not have the ability to provide change for large bills.