The global pandemic has put an immense amount of pressure on all of us. Whether you’ve had to adjust to teleconferencing with your coworkers or you’re struggling to homeschool your child, handling all of these rapid changes hasn’t been easy. And while 40% to 50% of U.S. married couples end up divorcing, it’s likely that those rates could increase as a result of quarantine and other COVID-related complications.
However, those might not be the only issues your family might be worried about during the pandemic. With millions of workers being laid off or temporarily furloughed and non-essential businesses being forced to shut their doors, it’s no wonder that finances could be a major concern. Although there are 30.2 million small businesses nationwide, most of them have struggled to obtain financial aid from the government. And unfortunately, one stimulus check won’t be nearly enough to see most Americans through these uncertain times.
Whether your family has already been negatively impacted by the novel coronavirus or you’re bracing yourself for an economic downturn, these tips can help you stay afloat and allow you to manage your finances as we weather the storm together (while staying six feet apart).
Know Which Expenses to Prioritize
When you’re facing a mountain of bills and already have certain debts to deal with, it’s hard to know which payments should be prioritized. You might think you should pay down your debts first, as it’s hard to function with that hanging over your head. But actually, it’s best to address your family’s immediate needs first.
In many places, freezes have already been put in place for things like student loans and mortgage payments. This can allow you to focus on feeding your family or paying your rent. You should also take this time to eliminate unnecessary expenses, like gym memberships, frivolous purchases, subscription services, and more. Anything your family doesn’t really need should be put off for now.
Ask Lenders For Forbearance
Although there are some bills you may be able to delay paying, you’ll still need to contact your utility companies and lenders to let them know what you can pay or that you won’t be paying due to job loss or other financial strain. Some municipalities have already mandated that utility companies not cut off service to households that don’t pay; however, you’ll still need to let them know so that your power isn’t accidentally cut off. You may also want to see what your internet, cable, and mobile phone providers can do for you during this time. Credit card companies and banks may also waive certain fees, while medical bills may be handled via a payment plan or delayed payment if you ask for forbearance.
If mortgage and rent payments are still technically expected to be made, you may be able to negotiate with your bank or lender to defer mortgage payments. Your landlord may also be willing to work with you, particularly if you’ve proven to be a great tenant. Although evictions may be halted in some areas, there’s nothing official in place for how landlords and tenants should handle this situation. If you’re in a position to make a partial payment, that’s better than nothing at all.
Apply For Financial Aid
Around 60% of people say they’d leave their current jobs for full-time remote positions if they could. But while many people are now facing that work-from-home reality, many others are completely out of work for the time being. In addition to that $1,200 stimulus check you may have already received, you may be able to apply for unemployment benefits if your hours have been cut, your job has been eliminated, or you’re self-employed.
As you’ve probably already heard, it’s a challenge to even get through to unemployment offices, but 30 million Americans have now filed claims since mid-March. You may be entitled to an extra $600 per week and may be able to access state benefits on top of that. It’s important to apply for unemployment right away, even if you aren’t sure whether you qualify, as it can take weeks to get through and new legislation can impact eligibility. In addition, you may want to learn whether your family is eligible for food stamps or other assistance from your local Department of Social Services.
Don’t Take on High-Risk Loans or New Credit Cards
During this time, you may be looking for a quick fix to your financial issues. But experts warn to steer clear of taking out (or maxing out) credit cards or obtaining high-risk loans. While you may want to consider paying only the minimum on current credit card payments if you’re struggling to afford necessities, you shouldn’t apply for new credit cards during this time. This will just make your financial situation worse. If you do need to take out a loan, talk to your bank and see whether you qualify for a personal loan; these loans will certainly have lower interest rates than credit cards and other loan options. Keep in mind that tapping into your retirement account should be a last resort; although penalties may be waived for withdrawing these funds early, it’s still a risky move for your future.
Most families are experiencing some sort of financial hardship during this time. Whether your ability to work your full-time job has been taken away or you aren’t able to pursue a side hustle due to health risks, it’s clear that the economy has changed rapidly over the last two months. But with these tips in mind, your family may be able to get through to the other side with your finances still relatively intact.
For more tips and resources see my guide: Coronavirus Financial Relief & Resources for Minnesota Families