I was reminded of this just the other day, some advice given out by an industry professional in 2009—remember, way back when the economy was in the toilet and jobs had been lost? The advice actually very much applies to this COVID situation we’re in now, likely even more so, and that advice is to stash your cash. Everyone knows what I mean, right?
Pay the minimum on your credit card and lines of credit, if you have them, and stash the rest of your cash. That was the advice back then, because credit card companies and banks were slashing available credit and lines of credit with no notice. So if you had paid off your credit card and your line of credit and were expecting to have something for an emergency, well, guess what? For many, all that available credit was suddenly gone. Remember, when it comes to unsecured lines of credit, banks and credit card companies can suddenly slash your available credit in uncertain times, then and now. And what happens is that you suddenly have nothing, and your rainy-day emergency cash is gone. That’s if you’ve already gone through your savings, which many people have done—if you had savings to begin with.
Some know this already, but since COVID hit in March and put so many out of work, banks and credit companies have started slashing available credit. And you know what? They can do that. So if you suddenly have nothing coming in because your job is gone and there are no more unemployment benefits, no more anything, where does that leave you?
Not where you want to be.
Now, as bad as things are right now, you may have noticed that you can’t get a hold of your bank. It’s already happened to me. The branch where I have my main account has been closed to appointments and phone calls since the COVID shutdown in March, and this is only going to get worse. I ended up having to call a different branch after trying the online banking service and was then put through to someone else, then someone else again. I left two messages and they didn’t call me back, so I called again and again, finally reaching someone who did call me back, who then had to reach out to the branch manager who wasn’t taking calls to fix something that ended up being a mistake on their end that was costing me money.
Was it fixed? Yes, eventually, and I got the credit back after a lot of hoop-jumping, but this was one of those things, in the midst of this pandemic situation, that I didn’t want to have to juggle. When someone is holding your money or has you paying a fee you shouldn’t be paying, a pandemic isn’t the time for you to have to jump through hoops to get your money back. And you definitely don’t want to find yourself in a situation where you can’t access your money at all.
What are some of the things everyone should be doing? Look at the bank fees you’re paying, the interest on your loans and credit cards, your insurance, and anything to do with your financing. Did you know that many banks have been slashing interest rates and reducing fees for those who’ve called, those squeaky wheels who have been persistent? If you haven’t called, call. At the same time, look at everything you’re paying for insurance, your phone bill, any extras. You may discover that you’re paying interest and hidden fees that you shouldn’t be paying. Extra fees and hidden interest rates are the kinds of things that happen more and more, though they’re still a surprise for many. Are you paying for insurance from a company that has gone out of business or a service you won’t get anyways? Believe it or not, right now, you very well might be.
Ask questions. This is something that’s not taught or shared in schools, but should it be? Well, I believe this is the kind of basic essential teaching that should come before anything else. In fact, it was a few years back, before my son graduated, that I reached out to the current administrator and asked him to bring in a retired banker to teach the high school kids all about the finance world and banking and the kinds of hidden things the average person doesn’t know. The response was surprising, because he stated that what they already offer is good enough. I’m sorry, but the current education system is not set up to teach kids about finance, about banking, about interest rates, about managing credit, about loans, about how it works and how to use it to your advantage.
Just remember, none of us knows what’s around the corner, but keeping a roof over your head and cash in your pocket is more essential than ever. So make your calls and do your research, because you and only you can look after yourself.
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