8 tips to keep your finances safe during COVID-19Posted: May 26, 2020 - By Elizabeth Velez
While COVID-19 continues to infiltrate our lives, and institute a new “normal,” business owners around the world are under mounting stress. In trying times, rash decision making can be an overlooked threat to the financial well-being of your business. It’s important to remain vigilant to protect your financial interests now and for the future. From fraudulent scams to watch out for, to helpful financial advice, here is a list of tips you can use to keep your finances safe during COVID-19.
1. Stay away from cash advances
While merchant cash advances can help you secure funds for your business, don’t forget that doing so from your personal credit card is against merchant regulations.
2. Avoid taking loans from family or friend merchant accounts
Getting help from family and friends is great if they are able to lend you financial assistance. However, accepting money from your family and friend’s merchant account is against merchant regulations.
3. Monitor your accounts for suspicious new charges
Take the time to regularly look through your account charges. As painstaking as it may be, this type of vigilance will protect you from unauthorized account charges which could be bleeding your finances.
4. Consider state and federal loans like the PPP or EIDL
If you haven’t applied for one already, keep your eye out for the second rolling out of Congressional relief. The Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) will be available again soon. Be sure to stay informed of the regulations around these loans, as they are constantly changing.
5. Be vigilant of scams
Text messages that claim to be government agencies offering financial relief and ask for your personal information should be marked as a red flag. The state and federal government will never call or text you asking for your personal information, so it is likely that this is a phishing scam.
6. Look for discounts
If you haven’t done this yet, now is a good time to look around for other vendors to purchase the supplies you need to run your business. Many vendors are selling products at discounted rates, which can help you save money on the products you need. Just make sure you’re buying from a reputable vendor.
7. Rethink using your emergency funds, or start building one
You may have emergency funds that you can pull from when your business is losing money. Try not to dip into these valuable funds just yet. It’s important to think about the long haul. Shift your focus to see how you might be able to make small cuts in spending. On the flip-side, if you don’t have an emergency fund, see how you might be able to slowly start building one. Since many businesses have been closed, there are many things that you may not have been spending on since they weren’t available. Consider taking the money you would have used for lunches, for example, and use this money to open an account for emergency funds. A little goes a long way over time.
8. Consider getting help on how to manage your finances
Knowing what is the right or wrong financial decision can be daunting during an economic meltdown. It’s okay to reach out to a financial advisor for advice on how to manage bills, budget, and debt collection before you fall too deep into debt. This doesn’t have to be a financial undertaking in itself. There may be financial planning tools available to you from the bank you already do business with. In addition, there are places like XY Planning Network which offer free financial advice.
Don’t wait until you’re in serious financial distress to begin taking these steps to keep your finances safe. Making small changes in spending, and keeping an eye on your accounts can help you manage your losses or enhance your gains. Remember, don’t be afraid to ask for financial guidance from a professional.
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