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Day 6: Recession-Proof Your Finances

Mar 22nd, 2020 • Jasmin Snyder

It’s Day 6 and today Pete covers the dos and don’ts of helping family during this time and answers all your refinancing questions. Let’s jump in!

Helping Family Members

It’s likely you already know of someone struggling with unemployment or reduced hours during this time. If you are blessed enough to still have your job you may feel inclined to help your impacted family members.

Pete’s take? Help yourself first. Yes, it sounds a bit selfish, but using the ol’ put your own oxygen mask on first metaphor — you’ve got to make sure helping others won’t hurt you too. If your savings is in good shape, your job is secure, and you can help a loved one make rent this month, sure go ahead. But be sure that loaning someone $200, $500, whatever it is will make a true difference. If they’ve lost income and aren’t able to make rent for months to come, your contribution is just a drop in the bucket. It could just push their problems ahead a few days or weeks.

If you can commit to helping family on a long-term basis that’s great, but if not be clear about how exactly you are able to help and for how long before you open up that door. Your financial life has to be a priority. It’s important to remember that all financial lives are relative. You may make more than your family member, you may have more in savings than your family member, YET your stability is still in the balance during this time. This isn’t an excuse to be stingy, it’s a reality check during this emotional time.

Should You Refinance Your Mortgage Now?

As you may have heard, mortgage interest rates have been very low in the last couple of weeks. They fluctuate over time, but this past month they’ve gotten lower than they’ve been for a while. This typically increases the amount of refinances that happen.

Refinancing can change your mortgage length and interest rate. Some people do this to lower their payment, some people do this to accelerate their payoff, and some do it to lower the total amount they’ll end up paying. In “normal” times Pete would recommend refinancing to a shorter mortgage at a lower interest rate, but this is not normal times. At this point, if you are considering refinancing it should be to help lower your payment if you are concerned your overall income will be short for a while.

Bottom line for both of these topics: your three-month stability is your #1 priority.

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