The Coronavirus pandemic has led to global uncertainty. If you’re one of the millions of Americans who have either lost your job or are at risk of losing your job, you may find that your personal finances have been thrown into turmoil and that you’re experiencing a high amount of stress.
Here are some tips on managing your personal finances during the pandemic and how to prepare for the future.
If You’re Out of Work, Let Your Creditors Know
Debt repayment plans are worked out based on the debtor’s ability to pay. If you’re out of work, it’s important to let your creditors know that you’re unable to pay. Ordinarily, they would either work out a repayment plan with you or begin obtaining court orders and repossessions.
But these are not ordinary times. Your creditors may be more forgiving as the chances are most of their debtors are in the same situation.
Don’t just ride it out and let your bills go unpaid or have to make the choice between paying a bill or putting food in the house. Reach out to your mortgage lender, credit card company, and even your landlord and explain the situation.
If You’re Still Working, Cushion Your Emergency Fund
Lucky enough to be still working? Now is the time to add an extra cushion to your emergency fund. The true economic ramifications won’t be felt until well after the Covid-19 pandemic has come to an end.
Prepare for a devastated economy by cushioning your emergency fund now. Try to save as much as you can.
Just because you’re still able to work now, with the uncertainties going on in the world, this could change in the blink of an eye.
Use a Finance Calculator for Money Guidance
Do you require guidance on how to manage your money? Consider Calculator.Me for a simple calculator anyone can use.
They provide a range of different financial calculators to help you figure out repayments and what you can afford for a variety of things.
Don’t Avoid Paying Something Just Because it’s an Option
Some things you should pay and some extensions you should take advantage of. Delaying a payment just because you can doesn’t mean it goes away. It just means you have to pay more later on.
An example of something you should take advantage of is the IRS payment deadline, which has been extended to July 15th. However, keep in mind, that if you can afford to pay your taxes now, you should do so, or even just pay a little each month to lessen the amount due on the 15th, to avoid stressing yourself out later.
There are also some extensions on student loan repayments you may want to look into if you’re struggling. However, if you do have the cash to put towards student loan payments now is the perfect time to do so while they aren’t gaining any interest.
Avoid Using Credit Cards and Personal Loans for Non-Essential Items
It may be tempting to put a non-essential item on a credit card or to take out a loan in order to buy something, but this can hurt you in the long-run.
Resist the urge to spend now as the interest rates will just lead to problems later. If you’re at the point where you can’t afford a non-essential item without borrowing, it means you also can’t pay off your credit card or loan at the end of the month without incurring interest.
As tempting as it may be to take advantage of the various sales retailers are offering now, avoid purchasing any non-essential items during the pandemic if you can’t pay with cash out of your own pocket.
Utilize Local Resources for Help
For millions of Americans, the pandemic isn’t simply an issue of not being able to go out and experience luxurious. They’re hurting and struggling to survive.
If you’re struggling to survive, look at some of the local resources that you may be eligible to take advantage of. Many states have opened up food banks and free school lunch pickup sites for kids.
Furthermore, many local resources aren’t widely publicized, so do your research using 211. They have a comprehensive database of all the different resources in your area.
Cut Some Expenses
Now is the time to clean up your spending habits. Think about all the recurring payments you have and see which ones you can cancel. Many of us have automatic payments we don’t even think about.
Another way you can cut down on expenses is by using less energy and water at home. Simple actions like turning off the lights and unplugging everything when you’re not in the room can quickly add up in energy savings.
It’s also worth checking to see if you have the cheapest supplier. If possible, switch suppliers to a cheaper one.
Pick Up a Side Hustle
The chances are you have a lot of free time now. Use this time productively by picking up a side hustle. Start working online and start generating an income source through the skills you already have.
For example, consider writing, programming, data entry jobs, or graphic design. These are all things you can do from home while setting your own hours.
To get started, there are plenty of websites and job boards you can find with a quick Google search.
If you don’t have small children at home you could even consider applying for some remote jobs, which would allow you to get benefits.
Don’t Get Carried Away When Shopping for Essentials
The world is not ending, and stores are not going to close indefinitely.
Don’t waste money trying to stockpile for the coming months. This is only going to drain your short-term resources for no real benefit.
Not only that, from an ethical point of view all you’re doing is depriving your fellow citizens of the things they need too.
With ‘sheltering in place’ orders still in effect AND the fact that this virus is spreading quickly, it’s understandable to not want to have to keep running back to the store. A good amount of items to have is enough for 3-4 weeks so you can make a trip once a month to the store.
Reevaluate Your Budget
Life is not the same as it was before. Life will not be the same as it was before for a long time. Our circumstances have changed, so it’s wise to create a budget to reflect that.
Go back to your budget and reevaluate. See what can stay and what needs to go. Prioritize the essentials.
Depending on your current circumstances, this may require more work than you think.
These Tips Can Help You Manage Your Personal Finances During the COVID-19 Pandemic
With so much uncertainty in the coming 12 to 18 months, prioritize survival in your personal finances. Things can change at any time, so it’s best to be conservative, not aggressive.
Keep this in mind as you reevaluate your budget and consider your spending habits in 2020.
What have you been doing to manage your personal finances during the COVID-19 pandemic?