Navigating the Financial Effects of COVID-19: What You Need to Know
Finances are probably the top of every conversation right now. Whether someone is navigating unemployment or others are furloughed, for some their jobs may be safe, but now employees are working from home, so that changes the costs of things. If you have wealth, COVID might not affect your daily needs, but the overall economic situation of America is going to definitely impact the bottom line. So basically, everyone has this genuine concern surrounding money right now, so Risen turned to the expert. Chuck Bentley is CEO of Crown Financial Ministries, the largest Christian financial ministry in the world. He also hosts a daily radio broadcast, My MoneyLife, and is an author. Bentley is the Founder and Executive Director of the Christian Economic Forum, a global community of high achievers with a higher calling and he took time to talk with Risen sharing advice for our readers during this unprecedented time.
Interviewed for Risen Magazine
Risen Magazine: World Pandemic, quarantine, unemployment, because of COVID, it’s a really interesting time. With everything going on right now, what would be the first piece of advice you would give somebody regarding personal finances?
Chuck Bentley: The first thing is to live well beneath your means. I like to imagine this game that I grew up playing called limbo. In the game of limbo, the goal is to get under the bar without knocking it off, and the bar in this example is your income. No matter what level that bar is set at, you need to come in beneath it, and actually the better, or lower, you can come in beneath it the more margin you’re going to have in your finances. It’s financial margins that we all need right now, we need to be sure that we’re cutting back on our spending.
In some cases I’m recommending 25%, because that’s what the economy is expected to shrink at least the next 90 days. If the economy is shrinking that much, then probably our spending needs to be cut back that much. That will allow you to start saving money, and it’s savings that’s going to get you through this bumpy ride. If you weren’t saving going into it, then you’re probably in a lot of pain right now, which means you’ve got to accelerate your savings. You’ve got to get radical with that. If you’ve gotten the stimulus check, obviously you’d need to save that, and do whatever you can to increase the amount of money you have for the future until this bumpy ride is over.
RM: According to Forbes, 30 million people are currently receiving government unemployment benefits. Other than finding a new job right now, which of course would be a top priority for the unemployed, what should people be thinking about now if they’ve lost their job or they don’t have income coming in?
CB: Three things I would give as advice to people in that situation. Number one, I would recommend to obviously get the government benefits, if at all possible, they’ve been extraordinarily generous during this season. If you qualify for those, get the benefits. Secondly, if you don’t qualify for them, you have no source of income, this is a great time to pick up a side gig. Not necessarily a job change, or a career change, but just a gig. There are hundreds of organizations hiring, whether it’s the logistics firms that are doing so much online fulfillment, those firms are hiring, delivery services are hiring, it’s really remarkable the shift that’s taken place. It does require flexibility, it will require making less money than you probably hope for, but I’ve found a side gig helps you get back in circulation.
People start talking about you, they get to know you a little bit better. In this day and age relationships are what leads to the next job. The more relationships you can develop, the more likely it is you’re going to get rehired. Then I would say thirdly, look at this as a time for opportunity. Many times out of our worst pain comes our greatest victory. I’ve seen people who have been miserable pre-COVID in their job, and God is leading them to use this as a springboard to reset what they wanted to do with their life, and to find something that better fits their skillset. It should actually be an exciting time, not a depressing time.
RM: How we can get creative and maybe offset this crisis, like you’re saying, with something that we might be more passionate about?
CB: I love the principle of inverse prosperity, it comes from Jeremiah 29 in verse 11. Most people have that hanging somewhere in their house – it’s needlepointed somewhere, or it’s a screensaver – that God says, “I know the plans I have for you, to praise the Lord, plans to prosper you, not to harm you, plans to give you hope and a future.” Well, before he says that he gives them advice on how to prosper, instead of waiting, and praying, and asking for prosperity, he gives you an action plan. That plan is to go into the city where you live now, wherever you may be stranded, and seek the peace and prosperity of that city.
With that attitude, we go to work thinking to ourselves, “How can I help my employer prosper? How can I help this company that’s giving me an opportunity to make more money? How can I help them grow, or expand, or to get new clients?” That attitude makes you very valuable. It’s what you bring to the organization to increase their value, and the more value you increase for others, the more you prosper. Instead of thinking, “What can I do to prosper in this economy?” We look for opportunities to help others prosper, and that’s how you fill a need in this type of environment. Who’s hurting? How can I help them? What do I uniquely bring to the table? That’s how you will personally benefit.
RM: If for some reason a reader is thinking, “I have my job, it seems safe, my needs are met. Why should I care about these unemployment statistics, or the government ending benefits?” What would you want them to know?
CB: Well, I would say if one wing of the airplane has fallen off, you need to be very concerned about that plane continuing to fly. Right now, the numbers I’ve seen say that about 35% of Americans have had COVID impact their livelihood at some level. Either they’ve cut back on hours, or billings, or maybe their industry shut down. My neighbor told me, who’s an attorney, that he’s billing only 50% of what he was billing and year ago. His work has really slowed down, and that means the whole engine is slowing down, and that should concern us all. We want to get people re-employed, that’s good for all of us. When our economy grows, we all benefit. It’s that reciprocation that… I call it the concentric circles, when the whole thing is moving and growing, we’re all going to get lift from that. That’s what we should desire. If you have a neighbor, or a friend, or somebody at church who is really suffering, don’t just have pity on them, do something. Invite them into your network, see what you can do to help them get re-employed, or find something for them to do. We’ve been very active helping people do that and it’s exciting, really.
RM: We’ve seen from major retailers to small businesses, so many I’ve had to close their doors permanently. The stimulus check was supposed to boost business, there’s been talk of a second round, whether that happens or not, but is that really the answer? I mean, no one’s going to turn away free money, but what does it really costing us as a country in the long run?
CB: Well, you move into the macroeconomic discussion, which I think is really, really important. In my view, the solution to our problem now is the foundation for our future crisis. We cannot solve a money problem by going further into debt. We’ve staved off the depression, and I’m glad we have, but we would be in a depression right now without that $2 trillion of stimulus. But it’s also $2 trillion that will have to be paid back by my children or grandchildren at some point to create economic stability. We’ve just kicked the can down the road in my view. But let me just mention too, when you talk about major segments of our economy dropping off, like retail. Well, that also impacts trucking and delivery. Those are the two largest employment sectors in America. When those slow down, you have the real problem with everything else tied to it. Now mall leasing and mall spaces is going down, tenants are leaving, so now real estate trusts are impacted. Then that means the major brand who are supplying those retailers, they’re impacted. It means in places like Bangladesh, or Thailand, or Cambodia, where there’re women sewing for $1 a day, or $2 a day, now they’re impacted. It ripples negatively all over the world, we’re interconnected, and so we need to be concerned about this. It’s a very dangerous time.
RM: Many parents have school on the top of their mind right now. There’s widespread worry surrounding this widening education gap in our country. I think this goes hand in hand with finances. Those with the economic means can hire tutors, or have private school options, and waivers, or maybe one parent that can be committed to being home full-time. While single parent homes may not be able to do that, or they’re struggling just to cover basic needs. People can’t even afford any other options, so there’s no simple answer for this. But from a financial perspective, is there something that can be done so that this gap doesn’t widen so big that it can’t be closed?
CB: It’s a great topic, and one that we’re seeing direct impact with our staff who are dual income families, and they’re trying to keep their jobs going, juggle with their career while also keeping their children occupied or educated. It’s a real, real strain right now. I mean, the solution that I like, I’m just going to throw it out there. I would like to see a temporary reversal of where our tax money is going. If the schools can’t open, then send that tax money to the people who are having to homeschool their kids, so they can hire a tutor, or they can bring educators in to help them out. I think that’s a good solution. That’s probably not going to happen, that’s in our dreams. We pay into the system to get our children educated and that’s not happening, and it seems like that could be redirected.
But another option is to go to the local church, and for those families who are just really hurting, they’re really on the edge financially, they need some assistance. I know the church is able right now and willing to help those families. We’ve got a family member, one of my grandchildren are being homeschooled for the first time. My daughter-in-law is really struggling with it. It’s a real challenge to make that work, it caught her off guard. But I’m watching from afar and they seem to all be adjusting okay. Just from a financial standpoint, look for help, reach out to your family and ask for help, reach out to your church or your network, because it’s not an easy time.
RM: What should we be telling our kids, or middle school/ high school aged kids, about money right now?
CB: I have a teenager still at home, and we’ve had to have a real heart-to-heart talk because I don’t have a tree in the backyard that’s growing money. I mean, I’ve had to tell him, “Let’s go walk around the yard, do you see anything out here that just growing money?” Reality has to set in. The reality is it’s harder for young people right now to get a job. The kids who were working restaurants, or retail, or loading and unloading in electronic stores, those jobs are hard to come by right now, and so they’re going to have to get realistic about how they manage money. They may not be able to get the next new iPhone, they may not be able to do the things that they have done in the past with their time. They need to start thinking very specifically about how they can add value in an ever-changing, quickly changing economy. What skills are they going to need? What are they going to have to do to get into this new economy so that they don’t get left behind? It’s changing fast and we need to give them the skills to keep up with it.
RM: We also want to let people know you have an e-book that has seven practical steps to help people prepare now for the economic fallout that COVID is, and will continue to bring. Where can people get the book?
CB: We created a whole landing page for COVID, it’s crown.org/coronavirus. There were more keeping up with job trends, we’re posting how to start a crisis budget, how to get out of debt, how to navigate through this time. I had the e-book there on the seven steps that I’ve been recommending for my children, and our staff. But essentially I can summarize it like this, this is the time to cut back on your spending, even if it’s not necessary right now. It’s a time to increase your savings, and to also be generous. Because if this were a tsunami, or an earthquake, or a flood, or a fire, or any of those natural disasters, we would be in shock at the extent of it. But it’s a little bit unseen to us just how expensive it is, but that doesn’t mean we should pull back on our giving during this time. We need to support those who are hurting, whether it’s just family members, or people in your neighborhood, people in your church community. We need to be helping those, if we’re able to, helping them as best we can. Then preparing for the long haul, I think we’re going to be talking about the effects of this pandemic for the next two to three years. This is not a time to think, “Okay, this is over. I’m going back to normal, spending up to the limit on my credit cards, and living with a thousand dollars in the bank.” No, we need to change that, we need to look at it from the standpoint that the Bible tells us. We’re always to be prepared for the unexpected, and the best way to prepare is to live beneath your means.