Last night felt like we were all in a movie.
It’s like everyone collectively realized the gravity of the situation.
The President addressed the nation, the response was underwhelming and the stock market is yet again crashing.
The NCAA announced March Madness will continue but with no fans (I would be shocked if it wasn’t canceled).
The NBA suspended the season after a player from the Utah Jazz tested positive for the virus.
And Tom Hanks and Rita Wilson tested positive on a movie set in Australia.
Sh*t got real for a lot of people last night and if it didn’t, then it should.
This is a situation where panicking doesn’t help (because panicking never helps). But it’s better to be safe than sorry so taking extra precautions is perfectly logical under the circumstances.
Now is the time to create something of an overreaction plan because this thing isn’t going away any time soon.
I don’t pretend to know what’s going to happen next but these are the assumptions I’m operating from at the moment:
Many people will have to work from home for a while. I’ve worked remotely for over 4 years but do so from a shared office space. Technology makes it easier than ever to work from anywhere but it can be an adjustment, especially if you’re stuck at home.
I suppose it’s possible people become more productive away from the office since no one’s around to bother them. That is, unless your kids are also at home for the foreseeable future…
Schools and daycares will likely close. I’m assuming that most schools and daycare facilities will be closing in short order. My daughter’s spring break starts at the end of this month. I doubt she makes it that long before an extended close.
I feel for the daycare workers in this instance since many of them are hourly employees. For those parents who are forced to work at home (or continue to go to their office), it’s not a bad idea to talk with current daycare workers to hire them on as part-time caretakers if and when they close.
That not only helps you continue to be a productive member of society but allows those service workers to earn some money while they’re part-time unemployed.
The economy will go into a recession. The pandemic is grinding things to a halt around the globe, disrupting global supply chains, making things difficult on small businesses everywhere, and causing people to re-think their spending decisions in a variety of ways.
I would be shocked if the economy didn’t slow considerably because of this. Eventually, we’ll get back on track because this too shall pass but that doesn’t mean an economic slowdown in the meantime won’t be painful for many people and businesses.
It’s been a long time since we’ve been in a recession. Start preparing for it now because it could be here sooner than you think.
Get your finances in order now. Emergency savings account — this is your time to shine. Many people probably don’t have an emergency savings account and if they do, it may not last long during an extended break from work.
So you should figure out all back-up forms of funding if it comes to that. This could range from home equity lines of credit to zero interest rate credit cards to Roth IRA contributions.1
And anyone who hasn’t refinanced in the past year or so should look into doing so pronto. Rates have come down considerably and can offer a fixed amount of monthly savings that can be used to shore up your finances elsewhere.
And finally, understand which fixed expenses are expendable. There are a number of memberships and subscriptions people have that can be used to free up monthly cash flow. This could be gym memberships, Netflix and the like but it never hurts to contact your phone, cable/Internet or insurance providers to negotiate lower monthly rates.
The worst thing that can happen when you ask is they say no.
I’m not a health expert so I can’t really comment on how to prepare for the virus itself. There are many other experts out there right now giving reasonable advice.
It’s possible all of this is an overreaction but I would much rather overreact than underreact in a situation like this.
Fear and Influenza: How Viruses Spread
1I hate to see people ever tap their retirement savings but for some people, this could be their only option.