Making the right financial moves right now can be challenging, especially if you've been affected by the Covid-19 pandemic.
Financial expert Patrice Washington says that she's noticed some common mindsets, both negative and positive, that Americans have been adopting recently. And those attitudes can impact how you approach your finances.
Here's a look at the mindset Washington says people should avoid right now, as well as what you can do instead to set yourself up for success.
Washington has seen too many people get hung up on pride, she says. Instead of taking advantage of federal assistance programs, community outreach or even payment deferral plans from lenders, some have simply tried to tough it out.
Don't do that, "even if you've had savings for the last several months and you've been thinking, 'I will weather the storm,'" she says.
Washington is speaking from experience: During the Great Recession, she believed she didn't need help and could go it alone. She eventually had to close her real estate company and ended up $2 million in debt. "One of the things that I regret is that I didn't allow myself to get support sooner," she says.
Even if you have a little bit saved and you know you have something left in your 401(k), don't wait until you have to drain that to create an action plan for how you're going to move through this recession, Washington says. "We have no idea how long this is going to last, so don't exhaust your savings and don't exhaust all of your alternatives just yet," she says.
Instead, start to take advantage of assistance programs before you hit rock bottom. Some federal mortgage forbearance programs are still available through the end of the year, as well as the suspension of payment and interest on federal student loans. Additionally, many major credit card companies are still offering payment assistance programs.
"Make sure that you're constantly researching and figuring out how you can take advantage of different programs that are available to you," Washington says.
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Washington has seen positive mindsets take hold right now as well. The pandemic has seemingly reinforced the message that wealth is more than money and material possessions, she says.
"This is a season where I've seen people taking more joy in spending time with their family," Washington says. People are tapping back into the values and morals that ground them and enable them to recognize that they're more than just the money they earn. It feels like many people have started to say: 'I have so much more to offer the world,' Washington says.
That's an attitude everyone can aim to adopt. "Don't define yourself by the bank balance or what's in the 401(k)," Washington says. "Define yourself by how you treat people, how you show up, how you take care of your space and how you stay grounded."
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