5 Things Not to do With Your Money in a Pandemic

Americans are, for the most part, in uncharted waters given our current health and economic climate. But copious hand washing, deep breaths, some distractions (thank you, Netflix), and a little expert financial advice can really help. Listen up.

By Cheryl Lock
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As we all grapple with the daily changes surrounding the Coronavirus and what it means for our collective health, another fundamental issue is surfacing: What’s going to happen to our finances? With the state of the market these days and the uncertainty of our future, it’s no surprise that 76 percent of Americans are worried that the Coronavirus will trigger an economic recession. “It’s a scary time, financially, because the markets have been incredibly volatile over the last week or so,” says Anna Keisler, a financial planning associate with SG Financial Advisors, LLC. As anyone with a retirement portfolio knows, the correlating large drops in the value of our investments is pretty scary, as well. 

In this age of around-the-clock news, Keisler reminds people that while breaking news gets your attention, it can also compel you to make decisions you might not during saner times. So, before you decide to stash all your cash in your mattress, consider this expert advice on what not to do with your money during this particularly wild ride.

Avoid: Pulling all your money out of the market

Doing so during any volatile time is not the best idea, says Keisler. “There’s no perfect time for investing, whether it’s pulling your money out of the market or putting it in,” she adds. “However, if you pull your money out because you’re afraid the market is going to go down even more than it already has, then you may also struggle with the question of when to reinvest your money in the market. It can create a cycle where you’re afraid to put your money back in the market and end up not investing again at all.”

Avoid: Ignoring your retirement account completely

Pulling your money out of the market right now isn’t a great move, and neither is discontinuing your regular contributions. “Another major mistake I’m seeing is people deciding to stop contributing to their 401(k)s,” says Matt Frankel, a CFP with The Ascent. “Not only does this prevent you from buying low, but it could also result in a higher tax bill next year, because most 401(k) contributions are excluded from your taxable income.”


While breaking news gets your attention, it can also compel you to make decisions [with your money] that you might not have made during saner times.

Anna Keisler, a financial planning associate with SG Financial Advisors, LLC

Avoid: Buying things you weren't planning to buy

As prices drop over the next few weeks and potentially months, it can be tempting to buy big-ticket items, but “just because a product or service is on sale does not necessarily mean that it’s a good deal,” says Kayse Kress, a CFP with Physician Wealth Services. “If you weren’t planning on purchasing a TV, and you see they have them on sale for 50 percent off and buy one, you did not save money. You spent money that you otherwise hadn’t planned to.”

The same is true of the stock market, Kress says. “If your financial plan requires paying down high-interest debt and building your emergency savings, you should not buy stocks on sale because you are ‘getting a good deal’.”

Avoid: Blowing your budget on online shopping

Now that we’re all housebound, there are only a number of things we’ll likely be doing: Binge-watching TV, cleaning and organizing … and online shopping. Consumers already like shopping online — something that’s been proven as online shopping continues to grow in popularity year after year — so it makes sense that we’ll be doing more of that now … but should we? “Ignoring your budget while stuck at home is another bad idea,” says Keisler. “Just because you don’t have your boss looking at your computer screen, doesn’t mean you should online shop all day.” As always, it’s important to try not to overspend, Keisler adds. While following a budget is always important, it’s especially important now to ensure you don’t get yourself further into debt in the case that a recession or layoffs do occur.

Avoid: Checking your accounts every day

The stock market can fluctuate on any given day but checking in with your accounts right now is practically guaranteed to make you act rashly. Case in point: One study found that 19 percent of people said they would abandon the stock market after just a 5 percent drop. (While big drops in the market tend to happen once every five or 10 years, smaller fluctuations in the five or 10 percent range happen much more frequently.) “By all means, watch what’s going on and stay knowledgeable,” says Keisler, “but if checking your account every single day makes you feel panicked, consider checking it less,” she advises.

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