Financial 'Not-Do' List
Expert Views on How to Protect Your Wallet from COVID
The pandemic has been a difficult and weird time for everyone. Those that have suffered directly from the virus have felt it the most, but there have been many indirect effects as well, especially for young adults that are starting off in their career, still in college, or any other stage of life.
Those who believe they will be able to return to their jobs once the pandemic is over has dropped to 34 percent in mid-July from 78 percent in mid-April, according to a recent survey by the Associated Press and National Opinion Research Center at the University of Chicago.
And, while we know you’re smart enough to take on the world – we thought of a list of financial not-dos compiled based upon our research and professional experience in the field, would save you from some of the widespread swindles that we have spotted.
In times of crisis we often get desperate to make some additional money. Unfortunately, there are many people out there who specialize in exploiting those who are more vulnerable because of the hardship they are going through. Now more than ever we need to be especially careful not to fall into various traps of 'easy money' and 'silver bullets'. We hope the following pointers keep you from falling prey to possible financial rackets.
Do not fall for phishing emails
Be cautious while opening emails. A lot of times, familiar but not legitimate emails might make their way to your inbox. Do not click on any links, or respond to these emails unless you are one hundred percent sure of the sender.
Do not fall prey to Multi-level Marketing a.k.a. Pyramid schemes
(... or Ponzi schemes, or any other bitcoin, or cryptocurrency related investment schemes)
This would involve anybody reaching out:
Claiming to “earn from your network”. This person is most likely to reach out to you with an “additional job opportunity”. Do NOT fall prey to this. Pyramid schemes often marketed as Multi-Level Marketing are illegal in the States. And, while we are aware of this, we have seen several of our workforce incumbents fall for these, so-called well-meaning recruiters.
Promising quick and high returns on so-called investments with little or no risk on any small or large investment you make upfront. As a financial risk professional, let me tell you, there is no such thing. This is a Ponzi Scheme. And, thanks to our advancement in cryptocurrency, this is a highly coveted ‘ensured-return’ investment marketed by scammers.
Do not send money via any social media platform, unless it is a verified product
The number of people I have come across sending money ‘charged’ to them by an online seller on Facebook, or Instagram only to never receive the product/service is astounding – especially during a pandemic, when I am not even meeting people. Do not put your money where your mouth is. Supporting small businesses and sellers through their online platforms is incredible, and highly encouraged during this awful trying time, we’re just advising you to do a little research on who the seller is.
Do not give out personal information – gov agent / bank / an African Prince
Let’s be honest, the IRS is not going to call you threateningly and blame you for tax evasion – not their style, and neither is an African prince that knows nothing but your email id, or number so incredibly moved that he wants to share his fortune with you, he has enough of his own people to share it. My point being – people do not randomly touch base with you asking for your personal details -SSN, address, mother’s maiden name (that is a bank security question, and kind of weird question to be asked to a person, in the first place). Hold your details to your heart!
Prioritize needs over wants
Focus primarily on priorities such as food and housing, internet services, healthcare etc. Think whether you can maybe cut back on take out meals, going out or some other activities that generate costs but are not essential and do not give you that much fun.
Call your cell phone and insurance providers
You can learn more about discounted rates that your providers offer. You might have needed the huge data plan, but if you're spending most of your time at home you can cut out these expenses.
Grocery shop simply and limit your food waste
You don't need to shop for fancy ingredients to have a great meal. Some of the best cuisines in the world are based on simple but good quality food items. Spend some time on your cooking skills and you will be easily able to cook well for less. Also, plan your grocery shopping ahead, so you waste less food. Your wallet and the planer will thank you for it.
Cancel subscriptions you don't need
It can be easy to forget all the subscriptions you might have. Take time to see which ones you really need and cancel the others to save up a few more dollars.
Don't ignore your financial providers Covid 19 Notifications
It may seem like all the banks have different openings and closings but you can switch to mobile and online services during this time. Sign up for autopay so you don’t miss any deadlines. Most companies also offer online chats or phone representatives that can help answer any questions you have. You don’t want to be missing any deadlines and having late fee charges!
Don’t Panic purchase and if need be find a local food bank
It is a stressful time for a lot of people and it can be easy to stock up but that can usually lead to shortages of items and not everyone gets their necessities or you can create even more credit card debt. For those who cannot afford daily necessities there are options for you as well.
If you have free time build your financial literacy skills
You can learn how to be better at budgeting and how to manage debt, maybe even dabble a bit in investing.
Focus on paying off the debt you already have
Since you might be spending less due to many things being closed due to the pandemic, consider using those funds to help pay off bills or debts so when you are able to go back to normalcy you have less to worry about.
Expand your emergency fund
In normal economic circumstances it's recommended that you have 3-6 months of budgeting expenses available if need be but during an economic downturn like right now you ideally need to have 6-12 months of savings.
Notice: This article, the authors, and Good Goes Viral is not affiliated, associated, endorsed by, or in any way officially connected with any of these companies, any of their subsidiaries, or their affiliates.
Our current project investigates financial literacy and education in the United States as a result of the COVID-19 pandemic. This publication is one in a series offering basic financial literacy guidance and education to young adults.
Written by Rbhya Pal and Kristen Bolleddu, United States.