As the Coronavirus pandemic continues, its relentless spread and feelings of despair fueled by the uncertainty of the situation are taking over all around the world. Although progress is being made toward developing a vaccine, health authorities cannot confirm when exactly a vaccine or a treatment will be made available. During these difficult times, people naturally fear for their lives and the lives of those they love. In addition, the fact that economists and business people are anticipating a global recession that could be the worst in modern history is further adding to everyone’s anxieties. Entire industries are collapsing, global unemployment rates have hit record highs, and we have yet to reach the bottom of this anticipated economic crisis. With the mightiest of companies taking a serious blow, people cannot help but wonder how this will affect the average person, earning an average income, leading an average life. The short answer is it will most likely be rough. However, this does not mean nothing can be done about it. As bleak as the future of our economies may appear at the moment, financial experts are convinced that individuals can come out of this crisis with the least possible financial losses, provided they make the right choices. Adopting a more preservative approach to the way you spend money in these uncertain times is perhaps the best strategy to protect your financial wellbeing. Everyone is bound to feel the effects of the Coronavirus-induced recession, no matter where they are and regardless of their line of work. That said, if you work in one of the most impacted industries, with your current household income potentially at risk, you should make a point of devising a financial plan sooner rather than later. Below we’ll cover some useful insights on how to best prepare for the upcoming recession, and how we should all deal with our money.

Cut Back on Unnecessary Spending

The skepticism arising from the possible repercussions of the COVID-19 outbreak is enough reason to exercise caution when spending money. For starters, you need to make sure you have enough to cover your and your family’s essential needs from food, health-related supplies, shelter, and other necessities.

Although this 'survival mode' might prove extreme to a number of people, this is precisely the kind of scenario where one should abide by the old saying "Better safe than sorry." A comprehensive spending plan can, in fact, be of great help as you navigate and adjust to the new norms of life under quarantine. There is no space for indulgences, no matter how bored and relentless you might be growing at home. This is certainly not the time to splurge on online shopping. The day may come where you find yourself, like many others, without a job. You will be glad you made the right decisions and were well prepared for such a struggle.

Some financial experts even recommend temporarily suspending your virtual shopping habits, so you do not feel tempted to spend compulsively.

As such, do your best to keep busy around the house and to optimize your time in isolation. You can play with your kids and attend to chores that you never had time for until now. Active distraction is key in avoiding wasting money on nonessentials, so start cooking more homemade meals, and cut your takeout budget. That said, if you can afford to continue shopping at local businesses to help them survive, then, by all means, do so.

It is a great way to support the local economy. The important thing is to do it reasonably without excessively burdening yourself. Now would also be a good time to sift through the numerous subscriptions that you will not benefit from for the time being. Contact your gym and your children’s after school activities providers, and see if they have a membership freezing policy. Otherwise, ask for a cancellation altogether. Finally, bring out your monthly credit card statements, check to see where exactly you are and how much you can cut back. This should allow you to see the full picture of your finances.

Invest in Your Retirement Plan

While this might seem counterintuitive under these circumstances, this is actually an ideal time to fortify your retirement plan. Although financial markets are recording daily losses and with stocks losing their value, do not submit to cashing them in if your retirement fund is tied to stock exchange values.

Also, do not attempt to engage in trading activities given the current volatility of the market, especially if you are nearing retirement age. Instead, work closely with your trusted financial counselors and inquire as to your retirement fund enhancement options. You might be advised to reach out to your employer and check the possibility of investing in a higher-return paying plan.
Once you calculate the amount for monthly installments and ensure that you can keep up with them, go ahead and make the upgrade. Most employers tend to match the investment you make in your retirement fund past a certain threshold, which is bound to give your retirement savings an appreciable bump. Whether you are closing in on retirement or you still have a few years ahead of you, this is one of the most efficient ways to manage your money.

Hold On to Your Investment Portfolio

Investing in the stock market is not just reserved for the wealthy. As a matter of fact, many people with average incomes trade in financial markets. If you own stocks yourself, you might be alarmed after the recent market dip — and rightfully so. Watching the news and listening to finance gurus warn about how this market trend will persist for quite some time is certainly no great reassurance. In any case, you are advised to hold on to your stocks and refrain from underselling them because of the fear of further losses. According to experts, the stock market always seems to find its way back up after a global recession. By setting realistic expectations in regard to this year's profitability and return on investment rates, you will be better off than selling your stocks for cheap and then repurchasing them at a higher price once the market improves.

You can, however, work on diversifying your portfolio. Try to invest in a variety of low-risk bonds that can offset the high risks of usually more profitable stocks. Note that your age will effectively dictate the amount of risk you can afford to take on, and the younger you are, the more risk you can endure if you engage in high-yield investments. The same goes for your job situation. The more stable it is, the more enabled you will be to afford risk (and vice versa).

As such, it's best to stick with your initial plan and to tread carefully with investment decisions in today's unstable market. Also, very important advice that a majority of seasoned investors will agree on is not following daily drops and rises in the market. It will not serve you any good and will only encourage you to make poor investment choices.

Craft a Plan for Unemployment

As companies are filing for bankruptcy and millions of workers are being forcefully laid off due to the pandemic, you need to be prepared for the worst. Working from home can be hard, and it can bring down morale. Even so, this is not the time to relinquish your professional stamina. If you know for a fact that your company is impacted and that your position might be jeopardized, take the initiative to inquire as to your job stability.

Also, discuss the eventuality of a temporary pay cut rather than a downright lay off. In the event your employer is able to give you precise answers, show that you are actively working toward finding a suitable alternative. You should also reach out to your local authorities and learn how to apply for unemployment benefits in your area. The better informed you are, the better you will be able to prepare for what lies ahead.

If you have a private business plan that you can adapt to suit the current circumstances, make sure to put it in motion. Since most employees are now working from home, you can line up potential freelancing jobs to keep you afloat. And while the economy, in general, is in rough shape, several industries are thriving during this Coronavirus crisis. Search for jobs in the medical field, telecommunications, or manufacturing, as these sectors are on the front line nowadays. Even if you are downgraded or making an involuntary career shift, remember that this is a temporary situation and that any job is better than no job at all.

Ask for Credit Extensions

Seeing as the outbreak is causing major damage across all industries, governments are stepping in to guarantee that the public is not burdened even further with money management and debt situations. As an example, in the United States, the taxation season is being postponed a few months to give citizens a much-needed breather.

Furthermore, governments are urging banks to practice leniency on loan holders and to allow for longer grace periods under the challenging financial conditions. As for other creditors, you can negotiate with your property owner to either lower your rent temporarily or allow you to defer your dues for the next few months and make a lump sum payment when you are in a better shape financially.

In case you recently took out a loan from your employer contingent upon your monthly salary, you can re-discuss the terms of the loan and ask for an extension. Alternatively, nothing stops you from starting a fundraiser if, for any reason, your creditors are giving you a hard time by refusing to reconsider payment deadlines. It is in such dire times that local communities must take a stand and offer each other a helping hand.

Study Your Finances

While this current health crisis may seem never-ending and insurmountable, it is bound to end at one point or another. Now, until that happens, take the time you have quarantining at home to go through your personal finances. More often than not, financial struggles result from a lack of organization. Since many people don’t dedicate enough time to revisiting their budgets, they eventually find themselves living well above their means.

Many people engage in excessive dining out, rarely using their monthly cable subscriptions, and never reading the magazines and online subscriptions that they pay for. As such, setting a clear goal to improve your financial planning will help you tremendously, even well past the Coronavirus crisis. In fact, you will be surprised at how much you will be able to save over time without any additional sources of income.

If money matters intimidate you, seek advice from a top financial advisor and follow their lead. In the end, a solid financial plan is bound to ease the financial shock that you would have otherwise experienced and suffered from.

When the Time is Right, Start Spending

The only way the economy can start to get back on its feet is if individuals—who naturally play a vital role—return to normal economic behavior. When people go back to consuming goods and services, the wheels of the market start to turn until the economy regains full momentum once again. Nevertheless, this is easier said than done. Most economists indeed believe it will take time for individuals to regain faith in the system and switch off the 'survival mode.' Even after health organizations announce that the danger is over and the outbreak is contained, people will still need a while to readapt to a new norm, whatever that turns it to be. It might take some years to overcome the Coronavirus recession completely. Ultimately, we all need to remain aware that each one of us can contribute to expediting the recovery smoothly and effectively.

The universal panic caused by COVID-19, although understandable, can further afflict the global economy. Now, the sooner we work together as an international community and follow the directives of governments and health authorities, the sooner this ordeal will end. Living in fear about our own lives and livelihoods can impair our judgment and get the better of us, and that is the reason why it is imperative to stay informed yet realistic at the same time. Like most people, you will probably face financial difficulties. That said, with some careful planning and a pragmatic approach, you will succeed in overcoming those hardships, and will ensure yourself and your family a prosperous future following the Coronavirus crisis.