COVID-19 threatens not only our physical wellbeing and quality of life but also our financial health and sense of security. It has changed everything from how close we can stand to one another to how, when and whether we can earn a living. COVID-19 has even affected our ability to save and ensure that our investments continue to hold value.
It should then come as no surprise that one of the groups hardest hit by this pandemic has been our veterans. With stocks down and unemployment on the rise, this demographic is facing significant financial losses at a time when they may need it most.
The contagious nature of this most recent coronavirus has sent unemployment rippling through the workforce. The Pew Research Center calculates that three months of COVID-19 rapidly took unemployment levels past those of the Great Recession—from 6.2 million in February to 20.5 million in May. Reduced to percentages, that’s an increase from 3.8 percent to at least 13 percent, with some figures pushing it closer to 16 percent.
Meanwhile, 15 percent of veterans work in the industries hardest hit by COVID-19 layoffs—sectors like hospitality and leisure and professional services. This past spring, unemployment among veterans rose to 11.8 percent in April and in June, continued to remain high at 8.8 percent.
Many older veterans aged 65 and up are facing tough decisions about retirement, their ability to earn income, and the real worth of their investments and savings. Factors like disabilities or health conditions that leave them more vulnerable to the virus are additional challenges.
Younger veterans are also at risk. According to the Military Times, “more than a third of the unemployed veteran workforce is individuals who served after Sept. 11, 2001.” With fewer years and less experience, they’re often more vulnerable to sudden, extended layoffs and have fewer financial resources like savings to rely upon.
In light of all of COVID-19’s risks, financial survival depends not only on careful planning but also—in many cases—financial help for veterans. A large part of that assistance is sound advice on knowing how to assess your situation and understand what your options are.
Your investments and their levels of risk need to match where you are in your work life cycle. If you’re younger, you can afford the higher risk and often higher potential yield investments because you have more time to weather market fluctuations and recover any losses you might incur. However, the nearer you are to retirement—and the more volatile the market—the more you need to reduce risk and shift investment strategies to ensure your money will still be available when you retire.
Mortgages, rent, public utilities, and car and health insurance, for example, are indisputable necessities. However, in a modern world, so are amenities like internet connectivity, mobile phones and transportation. Identifying discretionary spending may be as detailed as examining levels of service or being selective about features and add-ons. In paying for luxury packages or bundling plans, you may be paying for extras that you will rarely—if ever—even use.
Being able to negotiate a no-closing-cost refinance on your mortgage or shaving a percentage point or more from your current mortgage could reduce your monthly payments by hundreds of dollars. Likewise, moving unsecured debt like credit card balances from accounts with high-interest rates to a card or loan with a lower one can reduce payments. With less money dedicated to the interest and more to the principal, you’ll be better equipped to pay down balances.
If you view any incoming asset as an increase in income, you may be able to expand your number of income streams. Take advantage of any programs offering financial assistance for veterans. Whether it’s a community program that offers groceries or other resources or a state or federal one that provides discounts or subsidizes services, anything that saves you an expense while providing an asset is increased income. Don’t hesitate to reach out for help. Once you're financially secure, you can pay it back by helping others.
At La Capitol, we want to serve our nation’s veterans just as you have served our country. We are a community-based credit union committed to helping Louisiana residents learn how to better manage their financial future because we thrive only when the members of our community also thrive. COVID-19 has impacted all of us, but it doesn’t have to defeat us. Let us help you find the best way to manage your financial present to preserve your financial future.