The dramatic and lasting impact of the coronavirus has provided an urgent wake-up call for Americans when it comes to their finances.
We are more comfortable discussing financial matters today than we were at the start of the year, and have been making substantial changes to our spending and savings habits, according to a new survey from Life Happens.
Here’s a look at the most common financial steps Americans are taking in response to the pandemic.
5. Paying down debts
Nearly one-quarter of American adults (24%) have begun focusing on paying off debt since COVID-19 began spreading, according to the survey.
One quick way to pay off debts is to pick one and focus hard on it until it’s dust. You throw every dollar you can spare at it, and pay the minimum on the others. We lay out the details and reasoning behind this approach in “Crush Your Debt in 3 Simple Steps.”
If you need professional help with any type of debt, check out Money Talks News’ Solution Center.
4. Dipping into retirement funds
More than one-third of American adults (37%) have dipped into retirement funds to bolster their finances during the pandemic, the survey found.
It’s far from a first resort, but it can make sense in certain situations, as Money Talks News founder Stacy Johnson explains in “Should I Borrow From My Retirement Account to Pay Debts?” Sometimes you have no other choice.
Coronavirus-related related withdrawals may also be exempt from normal IRS penalties this year.
3. Delaying retirement
More than two in five American adults (43%) plan to continue working beyond their planned retirement date because of the pandemic, the Life Happens survey found.
While delaying retirement can be disappointing, it can also come with some unexpected benefits such as potentially larger Social Security checks.
2. Building up an emergency fund
More than two in five American adults (45%) are also working on building their savings and emergency funds because of the coronavirus.
Emergency funds can help provide a safety net for all kinds of situations, from unexpected car repairs to, yes, the expenses of a pandemic.
It’s always a great idea to have money set aside for a rainy day. For help, check out “9 Tips for Starting an Emergency Fund Today.”
1. Cutting excess spending
Nearly half of Americans (49%) are looking for ways to trim their budget in the wake of coronavirus.
That’s a practical thing to do any time, but especially right now. It’s also perhaps the easiest item on this list because it doesn’t involve coming up with extra money now or later.
We suggest “7 Ways to Cut Your Costs During the Coronavirus Crisis” — and you can use any savings you find to boost your emergency fund.
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