The global coronavirus pandemic and efforts to promote social distancing has greatly affected businesses and organizations, forcing many to furlough or lay off staff, or decrease working hours. Experiencing a sudden change in income can be devastating. You may have a flood of feelings, including sadness, anxiety, anger or helplessness over the uncertainty of what comes next. One way to cope with these feelings is to be proactive and financially responsible during this challenging time. This article will help you understand options to help you maintain financial stability.
Evaluate your budget – Creating and sticking to a budget is a fundamental of financial wellness. If you have one already—great! If not, establishing a budget (or updating an existing budget to reflect any recent wage changes) can help you stay afloat in this uncertain time. Follow these steps:
- Identify how much money you have coming in each month.
- List your necessary expenses such as insurance, transportation, prescriptions, bills, food, rent or mortgage, etc. You may notice a decrease in some areas due to being homebound. For example, you may not be spending as much on gas or public transportation. Calculate these savings and allocate the money to an emergency fund since the length of this pandemic is uncertain.
- Reevaluate optional expenses such as buying a morning coffee, dining out, gifts, recreational activities, etc. This is another area where you may be able save additional money. For example, you may not be purchasing food at restaurants as often as when you were working or now that you’re remote. Preparing your own meals can save a substantial amount of money!
- Calculate the difference between incoming money and money spent to see if you’re breaking even, or are over or under budget.
- Track your spending. The aim is to be under budget for financial security.
Prioritize your spending – After determining your budget, if you find yourself over budget, you may find it necessary to prioritize your spending. List the areas of spending by priority. For example:
- Essentials – Food, medicine, medical supplies
- Housing – Mortgage/rent, utilities
- Debt – Student loans, car loans, credit cards
Identify areas in which you may be able to receive assistance – Contact your financial institutions to see if they’re offering any support or relief. Additionally, contact your utility vendors to see if they are offering any discounts during this time.
- Many mortgage companies are reducing or waiving payments for those experiencing hardship
- Some credit card companies are allowing their customers to reduce their payments
- If you have a car payment or a student loan, contact your lenders to see if they’re offering any support
- Certain banks are offering hardship relief options, such as interest-free or low-interest personal loans. Avoid payday loans or reverse mortgages—they can be extremely detrimental to your finances.
Use your stimulus check wisely – In the coming weeks, stimulus checks will be provided by the federal government to many of our nation’s citizens. If you receive a check, it is important to include that in your budget and use it wisely!
If you still find yourself in need of support or need additional assistance, we’ve collected a list of resources you may find useful. Click here to access them.
It is important to allocate your finances in the best, most responsible way possible to weather this storm of uncertainty. Stay safe and stay well!
