Lots of things have changed this past month, and the world is a different place than it was in February and March. In February, we were going to parks and the beach here in southwest Florida. Now, the parks and beaches are closed in most places and city streets are empty. Kids are learning from home, church is being attended from home, there are weddings over Zoom, and people are paying you to buy their oil! Lots of things are different right now, but how you manage your money and build wealth have not changed because of COVID-19.
Kids Learning at Home
I think every kid in the United States has been out of school and learning while at home. At least learning from home has been the goal. Did anyone think kids would be finishing up the school year from home when this year started?
Even parents have had to figure out how to make this remote learning work. Some, if not out of work because of COVID-19, have had to change up their schedules to make sure one of them is at home with the kids. Since you need to be with your kids at home, this is a great time to teach them how to handle money.
Make sure you are teaching your kids about giving, saving, and spending. Have your older children learn how to budget. This will give them a good head start on managing their money when they are out on their own. Teaching your children about money has not changed because of COVID-19.
Gambling with Commodities
Investing to build wealth has not changed. You still don’t gamble to build wealth. You don’t invest in Bitcoin or commodities so that you can hit it big. These are risky investments.
The price of oil went to $1, and I wondered if it could go lower. It went to -$40 that day! Someone would have paid you $40 to take a barrel of oil because there is no room to store it.
Speculators who thought oil was cheap at $1 a barrel lost money when they had to sell their May contracts when oil went negative. It is still not a good time to invest in commodities. Investing in commodities is still not how you manage your money and build wealth.
I’ve seen many ads on the internet where you can buy a car for 0% interest and not make payments for 90 days. The automotive dealerships are just trying to help everyone out during these uncertain times, right? Wrong!
If you can’t afford to pay cash for a vehicle, you cannot afford the vehicle. Don’t fall for the 0% interest gimmick or the no payments for 90 days. How to build wealth did not change because of COVID-19. Taking on debt is not how you manage your money properly.
Some lenders are letting you defer mortgage payments for a few months. Don’t fall for this, either. If you have the money, then continue to make your monthly payments on your debts. Your goal is to still get out of debt fast. COVID-19 didn’t change your goal from paying off your debts to holding onto them.
The one exception I would make is if you have federal student loans. Those are being put in deferment for a year with no interest accumulating. Use that payment to pay off your other debts. This doesn’t change your goal of getting out of debt.
How to Manage Your Money and Build Wealth Have Not Changed Because of COVID-19
Even though the world around us is a different place than it was a few months ago, how to manage your money correctly hasn’t changed. You still need to budget and take care of your four walls. Pay the minimum payment on your debt if you can afford to. Do not go and buy stuff on credit. Do not be investing in commodities, even if they seem like a good deal.
If you need to, piling up cash is ok if your job is at risk. Otherwise, continue to get out of debt so that you can use your income to build wealth. When you are ready to invest for retirement invest in stocks. Don’t try to hit it big with alternative investments. Building wealth takes time, and COVID-19 hasn’t changed that.
The bottom line is, managing your money and building wealth is the same that it has always been. It does not matter what is going on in the world.