If one thing we must credit the pandemic for is that it has made us better money managers. But for how long?
If you have been following the business news for the past year, you will notice that there has been a shift in consumer expenditure patterns, prompted by the pandemic. Most of us have been forced to be money-savers, unable to spend our hard-earned money on holidays, socializing, and even commuting fees. In the same way, some of us have been forced to be fear savers, limiting our spending over concerns about the economic fallout resulting from the pandemic.
Whether you are used to the traditional brick and mortar bank, or an online institution, saving at a time like this may make no sense. After all, most people got laid off from work, which meant spending without earning. The volatility resulting from the pandemic had many Americans worried about their savings. In addition to that, most people have raised concerns about the United States financial systems and whether they are secure enough. In fact, about 68% feel anxious about the impacts of COVID-19 on the financial markets and savings.
Yet, even in the middle of all this chaos, many financial experts are urging Americans to stay calm, arguing that the American financial system is still resilient to the virus. Even though we are living in hard economic times, and undoubtedly our financial health will be put to rock bottom, experts say that you should not panic, and withdraw your savings from your account because no matter where your money is, it is still being insured
The COVID-19 pandemic has also shown a flaw in our financial health that we do not have a checking account. In order for the government to access Americans quickly for a stimulus check, an individual had to have a checking account or a savings account with a direct deposit. A report released in 2018 by the federal reserve showed that about 6% of the U.S. adult population does not have a savings account. If you did not have a savings account, it meant that your check would be mailed to you which can take months to get to you.
In the midst of a pandemic, here is what you should do with your savings;
The main goal is to have at least 3–6 months’ worth of saving stashed in at least two savings account. In one account, preferably, the one you have quick access to, save about $1,500 and the rest of your savings deposited in a high-yield account. While the Fed’s emergency rate cut will likely continue to drive down interest rates on savings accounts, having your money saved on a high yield online savings account will likely still net you a higher return than the national average of 0.09% APY.
Accessing Your Money
Supposing that you want to access your money fast because of an emergency, the first action should be to withdraw the cash that is at the same bank as your checking account. That’s the money that you can access quickly when compared to the money saved on the online high-yield savings account as withdrawing money from this account would take longer to reach you.
One thing you have to keep in mind during any crisis is that you should not make your financial-based out of fear that the financial system will collapse. For instance, the Corona Virus pandemic is unique and also devastating, but it is not the end of the world or the economy.