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6 Ways to Alleviate the Impact of Coronavirus on Your Wallet
As this worldwide pandemic continues to upend everyday life, many workers are starting to face financial uncertainty. In a recent survey, 18% of adults reported they or someone in their household had been let go from their job because of COVID-19. In fact, more than half of Americans say they are not financially prepared to deal with a several-week virus-related leave from work, according to a Prudential survey.
The long-term economic fallout from the coronavirus is still unknown, but many people may already feel stretched. As one-third of Americans wouldn’t be able to cover their general living expenses if they missed a paycheck, making ends meet as a result of lost shifts or a layoff can be financially and emotionally stressful.
With that in mind, here are six ways to help with making ends meet in these uncertain times.
No. 1: Create an emergency budget
If you don’t have an emergency fund, take a look at your current budget and start cutting expenses to prepare for your limited cash flow.
Your new budget should be much stricter than your routine spending habits and center on basic necessities such as rent, food, and utilities. Eliminating unnecessary expenses such as food delivery, online shopping sprees, or even streaming services can help to bank some cash.
No. 2: Tell your lenders and loan servicers about your financial difficulties
If your finances have taken a hit because of the coronavirus, speak with your lenders about your current financial situation.
Financial institutions have been advised by the Consumer Financial Protection Bureau to be flexible with Americans who are facing hardship during this time. Many lenders and credit card companies may waive ATM fees, overpayments, and late fees. They may also delay, adjust, or skip payments.
Let your lenders know your financial situation, the amount you can pay, and when you’ll be able to pay the normal amount.
For auto loan payments, explore options such as changing the due date of your payment, setting up a payment plan, and inquiring about an extension.
Federal student loans
If you have federal student loans, the U.S. Department of Education has good news for you, as it is automatically waiving interest accrual for all borrowers at this time. Borrowers can also temporarily suspend their payments without fear of late fees, penalties, or interest accrual. Forbes reported these interest-free options will most likely be in effect through September 30, 2020.
It’s important to note: These breaks do not apply to private student loans, as private lenders have their own repayment terms. Reach out to your student loan servicer to find out more about adjusting or suspending your payments if you’ve had a change in income.
No. 3: Take advantage of flexible unemployment insurance benefits
Because of the coronavirus, many state and local governments are giving extra support for those struggling financially -- and the federal government is also helping to give those checks an extra boost. “Under the [federal government’s stimulus plan], eligible workers would get an extra $600 per week on top of their state benefit,” reports The New York Times. But some states are more generous than others, so your total weekly payment will depend on where you live.
If you do lose income, inquire about financial assistance with your state’s unemployment office and public health office for available benefit options. If you think you won’t qualify, still make the call to confirm, as many self-employed people, such gig workers and independent contractors, may be eligible for something under coronavirus-related expansions to unemployment benefits.
Additionally, you may not have to lose your job in order to receive these unemployment benefits. You may qualify for unemployment insurance benefits if your:
- Employer temporarily stops operating because of COVD-19 and doesn’t permit employees to work
- You’re quarantined and expected to work again after the quarantine has ended
- You leave employment to take care of a family member
No. 4: Find out if you are eligible for stimulus money
To help alleviate financial strain due to loss of income from the epidemic, the federal government plans to issue direct payments to many Americans as soon as April. Eligibility and payment size will be based on income level and family size, but they are anticipated to be as large as $1,200 per individual for those whose income level qualifies.
Want to see how much you can anticipate receiving? The Washington Post has been tracking the progress of this legislation, and has created a stimulus check calculator so households can see how much they may receive.
No. 5: Apply for community and industry-specific aid
Community and national organizations are providing resources to workers who have lost their jobs or been furloughed during this time. Check your local state associations, nonprofits, food banks, religious organizations, and other groups about how to receive support.
Here are three organizations that are helping decrease the financial burdens brought on by the coronavirus:
- One Fair Wage is giving cash to tipped workers, such as servers, car service drivers, delivery workers, and personal service workers.
- U.S. Bartenders Build National Charity Foundation has launched the Bartender Emergency Assistance Program to help bartenders and their families during this time.
- CERF+ is setting up an emergency financial relief fund for artists who contract the virus.
No. 6: Only buy what you need
A recent survey found that even though the economy is rocky, Americans are spending $180 to stockpile supplies, such as cleaning products, food, and paper products. It’s easy to feel pressure to hoard supplies during this international pandemic. Experts have suggested that you buy what you need instead of panic-buying. Remember: If you follow the tips in this article, you should now have a budget for these items.
Remember: Keep calm and make a plan
It’s easy to feel overwhelmed during times of uncertainty. Making a plan to cut back on bills and expenses -- even if only for the time-being -- can help to free up your dollars for your most important needs.