Welcome to Dollar Scholar, a personal finance newsletter written by a 27-year-old who’s still figuring it out: me.
Each week I speak to experts about a money question I have, whether it’s “What if I don’t have any? 401(k)? or “How many credit cards do I need?” As I learn, I share simple ways to improve your financial life… and post cute dog photos.
This is (part of) the 35th edition. Then check it out below Subscribe to to receive future issues of Dollar Scholar every Wednesday.
Today I’m trying to look on the bright side. This coronavirus isolation thing sucks, but it’s not all bad.
I basically never have to get out of my sweatpants, so I’m always dressed for a nap. I went for a walk outside which allowed me to discover a dog park near my house that I had never seen before. I allow myself to eat comfort food without feeling guilty and my friends figured out how to play the jackbox game Attractive via Google Hangouts.
flattening the curve has its advantages. And I would be remiss in my cherished role as Dollar Scholar if I didn’t point out that I now have infinite time to take care of my finances.
TBH, there’s a lot of money stuff that I’ve put off because it’s difficult/tedious/annoying. I bet you also have some tasks that you have avoided until now. So I asked experts: What financial tasks can I do during my coronavirus quarantine?
1. Check my emergency fund.
Layoffs are already starting in some industries, and medical costs are particularly scary right now, so having an emergency fund is extremely important. Cobb told me I can save as much as I want, but a good guideline is three to six months’ cost. If I haven’t put that money aside now, my first goal should be to come up with a plan on how to do it right away.
2. Check my expenses.
Liu told me to download my credit card transaction history and collect my bank statements for the past three months. Then I should look at them closely and identify needs, wants, and wasteful spending decisions.
“No judgment or anything — it’s just observing behavior,” Liu adds. From there I should decide if there are any habits I should change, subscriptions I should cancel, and so on.
3. Go shopping (nearby).
For fixed bills like car insurance, Liu said it’s a good idea to shop around and/or ask about new quotes from my provider from time to time, as they tend to change quickly. For services like internet or phone, I should look for cheaper options and consider ditching.
Need auto insurance company recommendations? Read the last article from Money Best car insurance 2020.
4. Set up a high-yield savings account.
The interest rates offered by online banks will not be quite as high as they used to be recent Fed activity, but this is still a good time to open a high-yield savings account if I haven’t already. money likes SFGI Direct (1.86% APY) for high yield savings accounts and Ally (1.5% APY) for an online bankso these are probably good starting points.
5. Optimize debt repayment.
Liu said this is a unique opportunity to analyze all the high-interest consumer debt I have. I should move it to a 0% interest credit card or consolidate it with a personal loan if I have good credit (680 or higher). If my score is lower, Liu advised me to call my card company and negotiate a price drop.
“Given the current climate, they’re more likely to do that [than normal]especially with falling interest rates and the pandemic,” she says.
6. Pull out a credit report.
Americans are entitled to a free credit report from each of the three major credit bureaus every 12 months. In order not to blow them all at once, Liu recommended that I only pull one annual credit report.com. Once I have it, I should review the report for any fraudulent activity or errors.
7. Do my taxes.
It’s easy to forget watching CNN and worrying 24/7, but I’m still looking for revenue Taxes. The IRS has moved the tax day to July 15, but my state deadline may vary.
“It would make sense to file sooner rather than later if you’re going to get a refund,” says Cobb.
8. Consider life after death.
Cobb told me to get everyone in the family on the same page about money, while Liu told me to organize my documents and put together a will, power of attorney and health power of attorney. At the very least, I should check my beneficiaries on my retirement accounts to make sure they’re up to date.
bottom line? I can’t complain anymore about being bored alone because there’s a lot of financial stuff to do! Taking care of business might even improve my mood.
“The world feels pretty chaotic right now, and it’s human nature that doing something makes us feel better,” says Cobb. “It gives us a sense of control.”
Looking for money tips? promoted: