Financial Management in the Coronavirus Age

1
Ok, so you have your gun, your toilet paper and 300 tins of generic potted meat from the dollar store.

What do you do about finances?

I socked-away a little cash in the house. My job is in serious jeopardy, so half-pay unemployment is a real possibility.

In addition, I am facing some prepping start-up costs (gardening supplies, food stores, etc)

The purpose of this thread is how to manage money during this time.

EDIT:

So, my household is saving about $1,500 a month right now (absent Corona prep costs) and I thought I would share what I did:

1) Cut cable: It was only for sports, and that's not happening right now
2) Eating out: Between my daily taqueria lunches to Friday night pizza for the family, this was a substantial amount
3) Starbucks: this adds up surprisingly quickly
4) Student loan forbearance: we have several student loans between us. They are all on forbearance.
5) Car payment forbearance: Ford is offering temporary forbearance on car payments.
6) Gas -- working from home has put about $200 - $300 a month into our pockets on saved gas.
7) Cell phones -- Everyone is in lockdown at home, so wifi is doing the heavy lifting. Moved us from unlimited data to the lowest plan. Saves about $75 a month,
8) Insurance -- While my better half did not allow me to do this, I think this is a good time to raise your deductibles and lower your coverage amounts. There is almost never a time when we aren't home, so our risk of break-in has gone down. In addition, we are driving about 90% less miles, so I think it's a good time to reduce that coverage as well.
9) Trash -- Reducing our can size by starting a compost pile is another small savings.
10) Mortgage forbearance -- we don't currently qualify, but our mortgage company is allowing this for anyone who saw a drop in their income due to Corona.

We are using the additional cash flow to pay-down credit cards that were used paying for our move last year.

Hopefully this helps someone else.
Last edited by senorgrand on Fri Apr 03, 2020 12:42 pm, edited 1 time in total.
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Re: Financial Management in the Coronavirus Age

9
kronkmusic wrote: Sun Mar 22, 2020 6:11 pm Sell the kids.
If someone had just told me you can really do that, I'd be driving a Ferrari...
With the messy situation in China, I'd advertise on the established websites in Saudi Arabia and Kuwait.
I: ALL GUNS ARE ALWAYS LOADED
II: NEVER LET THE MUZZLE COVER ANYTHING YOU ARE NOT WILLING TO DESTROY
III: KEEP YOUR FINGER OFF THE TRIGGER UNTIL YOUR SIGHTS ARE ON THE TARGET
IV: BE SURE OF YOUR TARGET AND WHAT'S BEHIND IT

Re: Financial Management in the Coronavirus Age

11
No quick solution. It's the old exercise looking at monthly expenses to see what can be cut or at least reduced. The weather should be getting warmer, so heating bills should go down. Natural gas, electricity, water, sewer, garbage, landline phone, cell phones, cable or any type of TV or streaming services...whatever can be trimmed. Second job even if it's in an unrelated field? I know you just got your house not long ago, worth it to refinance since interest rates are lower?

I bought a car a few months ago but the interest is next to nothing.
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan

Re: Financial Management in the Coronavirus Age

14
Bisbee wrote: Sun Mar 22, 2020 8:29 pm A good argument could be made to go and max out your credit cards right now...
I have heard of this strategy. It really only works once and your credit is trash for a long, long time. Don't expect the banks to be forgiving anyone - ever.

The gubbermint is never going to pay off or forgive credit card debt for normal citizens. If you only had a multi-million dollar loan, you could threaten to sue the bank and be fine without paying (Trump did that).
It is an unfortunate human failing that a full pocketbook often groans more loudly than an empty stomach.

- Franklin D. Roosevelt

Re: Financial Management in the Coronavirus Age

17
There’s actually two good reasons to consider maxing out your cards, and neither bodes well for the future of the US but surprisingly neither will touch your credit score.

First, you would only do this if you believe that the economy has forever changed and there is no going back to how it was. If you believe that you probably are financially savvy enough to know that hyperinflation is in the horizon and the value of the dollar will plunge. In the most simple terms, that is a perfect reason to have lots of outstanding debt in dollars.

Now such a scenario also implies that financial institutions holding such debt will likely face insolvency and forced fire sale of the notes they hold in bankruptcy or restructuring. We nearly hit that point in 2008 along with a number of mortgages that were packaged, sold, resold, changing hands multiple times. Some intelligent folks living in homes with upside down mortgages actually stopped paying their bills and refused to leave their homes while demanding that banks show them the actual chain of ownership of the note for the mortgage. Such mortgages changed hands often enough that a clear paper trail no longer existed. Without that, no judge will allow a foreclosure sale to occur. Houses automatically becomes free and clear without an assigned owner for the note since all houses are seeded to the owner and the mortgage is merely a recorded document that gives rights for a foreclosure sale if certain requirements are not kept. So go ahead and consider buying that second home right now since the interest rates are so favorable...

In the case of our credit card, the issuing bank may well go under. The financial turmoil that causes would be beneficial to the cardholder who can effectively cut up his card and ignore the bills while forcing the collection company to, “Show me the note.”

And finally, (as a bonus) the law says if the person holding the debt passes away due to illness or whatever, the debt simply evaporates. Family members who are not co-signers onto the card cannot be pursued for the debt of the deceased. (Credit scores expires as well so why worry.) Not a bad idea to buy a bunch of gold coins with your credit cards now to hand out to kids or grandchildren. Many ways to build a legacy...
Last edited by Bisbee on Sun Mar 22, 2020 9:38 pm, edited 1 time in total.
"It is better to be violent, if there is violence in our hearts, than to put on the cloak of non-violence to cover impotence. There is hope for a violent man to become non-violent. There is no such hope for the impotent." -Gandhi

Re: Financial Management in the Coronavirus Age

18
highdesert wrote: Sun Mar 22, 2020 7:38 pm No quick solution. It's the old exercise looking at monthly expenses to see what can be cut or at least reduced. The weather should be getting warmer, so heating bills should go down. Natural gas, electricity, water, sewer, garbage, landline phone, cell phones, cable or any type of TV or streaming services...whatever can be trimmed. Second job even if it's in an unrelated field? I know you just got your house not long ago, worth it to refinance since interest rates are lower?

I bought a car a few months ago but the interest is next to nothing.
For many of us we are entering the high utility bills period. So far this year has been warmer than average and last year we had over 100 100 degree days. That has already been one 100+ day down here this year.
To be vintage it must be older than me!
The next gun I buy will be the next to last gun I ever buy. PROMISE!
jim

Re: Financial Management in the Coronavirus Age

21
sig230 wrote:
highdesert wrote: Sun Mar 22, 2020 7:38 pm No quick solution. It's the old exercise looking at monthly expenses to see what can be cut or at least reduced. The weather should be getting warmer, so heating bills should go down. Natural gas, electricity, water, sewer, garbage, landline phone, cell phones, cable or any type of TV or streaming services...whatever can be trimmed. Second job even if it's in an unrelated field? I know you just got your house not long ago, worth it to refinance since interest rates are lower?

I bought a car a few months ago but the interest is next to nothing.
For many of us we are entering the high utility bills period. So far this year has been warmer than average and last year we had over 100 100 degree days. That has already been one 100+ day down here this year.
Yeah we didn't get very many days of shutting the A/C off this year. We used to go months without turning it on.

Re: Financial Management in the Coronavirus Age

22
Bisbee wrote: Sun Mar 22, 2020 9:27 pm There’s actually two good reasons to consider maxing out your cards, and neither bodes well for the future of the US but surprisingly neither will touch your credit score.

First, you would only do this if you believe that the economy has forever changed and there is no going back to how it was. If you believe that you probably are financially savvy enough to know that hyperinflation is in the horizon and the value of the dollar will plunge. In the most simple terms, that is a perfect reason to have lots of outstanding debt in dollars.

Now such a scenario also implies that financial institutions holding such debt will likely face insolvency and forced fire sale of the notes they hold in bankruptcy or restructuring. We nearly hit that point in 2008 along with a number of mortgages that were packaged, sold, resold, changing hands multiple times. Some intelligent folks living in homes with upside down mortgages actually stopped paying their bills and refused to leave their homes while demanding that banks show them the actual chain of ownership of the note for the mortgage. Such mortgages changed hands often enough that a clear paper trail no longer existed. Without that, no judge will allow a foreclosure sale to occur. Houses automatically becomes free and clear without an assigned owner for the note since all houses are seeded to the owner and the mortgage is merely a recorded document that gives rights for a foreclosure sale if certain requirements are not kept. So go ahead and consider buying that second home right now since the interest rates are so favorable...

In the case of our credit card, the issuing bank may well go under. The financial turmoil that causes would be beneficial to the cardholder who can effectively cut up his card and ignore the bills while forcing the collection company to, “Show me the note.”

And finally, (as a bonus) the law says if the person holding the debt passes away due to illness or whatever, the debt simply evaporates. Family members who are not co-signers onto the card cannot be pursued for the debt of the deceased. (Credit scores expires as well so why worry.) Not a bad idea to buy a bunch of gold coins with your credit cards now to hand out to kids or grandchildren. Many ways to build a legacy...
I understand the theory. I just don't think the oligarchs will let all the banks run down. I truly foresee about four banks surviving and being run by the same groups who own the seed and food and water already. The rest of the banks are going to be swallowed up eventually. As long as there are people, there will be economies and oligarchs and armies.
It is an unfortunate human failing that a full pocketbook often groans more loudly than an empty stomach.

- Franklin D. Roosevelt

Re: Financial Management in the Coronavirus Age

24
Check your car insurance and other creditors. I have received plenty of emails from mine telling everyone to contact them if you need to make arrangements.

Of course, they are trying to figure out their own forecasted damage by asking us about ours, but it might work out OK for everyone when they get their bailouts from the gov. We gotta work with the oligarchs we have.
It is an unfortunate human failing that a full pocketbook often groans more loudly than an empty stomach.

- Franklin D. Roosevelt

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