Today Pete got real with the situation we find ourselves in. Will it be 3 months? Will it be 5 months? Longer? No one knows for sure but Pete is buckling in for the long haul. Check out his plan for finding money and prioritizing your financial decisions in this video:
As you prepare for what’s happened or what’s to come, cash is your priority. You’ve got to pay life-sustaining bills. These are the primary ways most people will find money during this time:
Each of these come with caveats and pros and cons, but the one thing Pete highlights is that retirement funds should be your very, very last resort. Pulling money out of retirement is a mistake for many reasons, the least of which is that the market will recover eventually. We don’t know when but it will recover and you want your money there when it does. If you’re going through this list and it’s not enough to get you through, here’s another list of “least worst” options before hitting up your retirement fund:
- Credit cards
- Credit lines
- Personal loans
- Family loans
- 401k loans
Credit cards run the gamut of bad to worse. If you have a lower interest rate credit card, under 10%, then it’s okay to tap this in a time of need. A credit line is something like taking out a home equity loan. Again, none of these are great options, these are truly “save your butt” options. If you need to borrow off your house it needs to be worth it. Though equity loans do tend to have much lower rates than credit cards, which can be important to note when you are making these tough decisions. Personal loans aren’t person to person, they are from the bank. Be careful here, these can be predatory, make sure you know what you are getting into. We don’t have to warn you that family loans come with many strings, but if you have family to rely on Pete recommends sharing resources over exchanging money. 401k loans fall under the same category as pulling out your retirement funds. Best option here is to stop your contributions and use that cash to fund your lifestyle.
Remember, these aren’t normal times. You are not making the best decision, you’re making the best decision for this exact moment in history. They are very different decisions.
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