May 11, 2020
Category: Money Management
How to Maintain Financial Health During the Coronavirus Pandemic
As we hunker down in our homes and practice keeping a safe distance from those around us, much of life continues to go on around us. Bills are still due, and your home expenses continue to strain your budget. With so much unknown about the future, you may be wondering what you should do next.
No matter your job or financial situation, there are ways you can prepare for the months ahead. Not all these tips will work for everyone, but they can give you guidance and inspiration as we move into the next few months.
Keep reading to learn how to maintain financial health even if you can’t work due to the Coronavirus pandemic.
If you’ve lost your job, the best thing to do is immediately start looking for a new one. Some companies are hiring more employees to keep up with increased demand. For example, Amazon is looking to fill 100,000 roles in warehouses as shoppers and as delivery drivers. Delivery and ride sharing services are experiencing higher demand and are hiring now as well. Some other companies to look into include:
While you job search, there are other ways to immediately boost your cash flow. You can start a side business, such as selling crafted items or offering online tutoring in a subject you’re skilled in. Creating an online resource that people can pay to use, such as curriculum, templates, or e-books, is another great way to increase your cash flow while you’re looking for a new job.
Thanks to the recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act, state unemployment benefits have received a boost from the federal government. If you have filed for unemployment, or you have to in the coming months, you may receive an additional $600 a week on top of state benefits until July 31, 2020. The CARES Act also expanded the availability of unemployment to gig workers, freelancers and other independent contractors, who were ordinarily not eligible for state unemployment benefits..
Whatever you decide to do, your main goal should be to maximize your cash flow as best you can. Since we don’t know when things will get back to “normal,”, it’s important to set yourself up for the future as best you can.
When stress rises and you feel a lack of control over your life, it’s tempting to fall back on the things that make you feel better for a little while, like renting the newest blockbuster hit or indulging in a little retail therapy.
While those things may not be major expenses by themselves, they can also quickly add up to create an unnecessary drain on your bank account. As you prepare your budget for the next few months, consider eliminating expenses where you can and use that money instead to grow your savings.
Start by looking over your monthly credit card and bank statements. Make a list of the things you need — real needs, not just conveniences — and the things that you can live without.
Though you may want to cling to the “wants,” the tens, if not hundreds, of dollars you can save every month by eliminating them will offer a much more effective stress relief in the end. We’re not recommending giving up everything that isn’t essential, but you should work hard to lower your monthly expenses in order to set yourself up for financial health during these times.
When funds are low and you have to prioritize expenses, it’s easy to put existing debts low on the list. After all, they’ll still be there when everything is more stable, right?
Though you may want to ignore your debts and loans for a time, avoiding payments can easily turn temporary financial difficulty into long-term problems. Credit cards, especially, tend to have high interest rates, quickly turning moderate payments into crippling debt that continues to grow as long as they go unpaid. If you can, continue paying at least your minimum monthly payment as long as possible. This will help ensure that your debt does not grow. Some credit card lenders may also offer relief for those affected by the Coronavirus. This helpful resource from Bankrate includes a list of offers for many credit card companies. Reach out to your credit card company to learn more about what options you may have.
The federal government has also offered some debt relief for students. As part of the CARES Act, the federal government has automatically suspended principal and interest payments on federal student loans through September 30, 2020. This can help provide a little more time and room to adjust your finances without worrying about your student loan debt growing. Federal loan servicers will automatically suspend the payments –no action is required by you.
Additionally, if you made payment on your federal student loans after March 13, you can request a refund from your loan servicer. Although the majority of student loans issued since 2010 are held by the federal government, you should know that the CARES Act suspension does not apply to private student loans. You can reach out to your lender or loan servicer, as applicable, to see if you can reach an agreement about your payments. Learn more about federal student loan suspensions at consumerfinance.gov.
The federal government is also providing relief to homeowners. The CARES Act does two things for homeowners with federally backed mortgages:
Learn more about mortgage relief options on consumerfinance.gov.
Reach out to your lender to find out what options may be available for your situation. Learn more about mortgage relief here. If you’re a renter, you may have options. Some states are offering relief for renters. If you’re having trouble making rent payments due to the pandemic, reach out to your landlord to see what options you may have.
While you’re hunkering down during the coronavirus pandemic, keep your finances in check with these tips.