The COVID-19 pandemic has upended the financial landscape as we know it. Global shutdowns prompted mass layoffs, forced businesses to shutter and halted the economy, leaving many people reeling from financial stress and uncertainty. While remaining physically healthy is the number one priority, managing your finances with scarce resources may feel impossible right now. The good news is you’re not alone, and you still have a few options to help you weather the storm.
Apply For Government Assistance
Your first step can be to see if you qualify for emergency financial aid from the government. You can find several COVID-19 government resources online, which are always updated with the latest information. There are many programs that assist with housing, groceries, small business support and student debt relief. You should also look into whether you qualify for unemployment benefits or paid leave, which might cover a significant portion of your lost wages. If you haven’t yet received your economic impact payment—better known as a stimulus check—you can still claim those funds online as well.
Contact Your Creditors
Asking for help from creditors may feel uncomfortable, but this is anything but a normal time. If you’re having trouble making your credit card, loan or mortgage payments, reach out to your lenders to inquire about obtaining some emergency financial relief. Be prepared to explain your situation clearly when speaking with your financial institution, as some banks offer temporary payment postponement. Inquire about balance transfers, which move higher interest debt onto a credit card with a lower rate, and might help you save some money on interest in the long term. You could also contact your landlord and utility companies to find out if they have a deferment or new payment plan. It may be daunting, but since so many people are facing similar situations, lenders have been more open to helping. It bodes well if you have consistently paid your debts on time. It’s important to avoid damaging your credit health by accumulating late payment fees.
Redo Your Budget
Saving extra cash is critical right now. If you don’t have a budget, now might be the best time to create one; if you do have one, review it to find areas where you can reduce spending. Maybe you have a gym membership that is not currently being used or a cable package that can be renegotiated. Plan your meals in advance. Take inventory of your pantry and refrigerator before going grocery shopping to ensure you’re only purchasing necessities and avoiding waste. Perform chores that are typically outsourced like mowing the lawn or cleaning. You can use any number of budget tools or personal finance apps to track your spending and help you cut back or avoid overspending.
Safeguard Yourself from Financial Fraud
Since the start of the pandemic, research has indicated an increase in attempts to steal personal information or engage in online fraud. Unfortunately, fraudsters prey on the fears of vulnerable people by spreading misinformation. Financial exploitation is particularly prevalent among the older population. If you receive emails or calls offering financial assistance or requesting sensitive information, approach those with caution. Don’t click on links in suspicious emails, either; reputable financial institutions will not solicit personal information via email. If you’re uncertain, protect yourself by contacting your financial institution for verification. Remember the old adage: if it sounds too good to be true, it probably is.
Consider a Personal Loan
If you don’t have an emergency fund and your stimulus check and unemployment payments are not enough to cover your expenses, you can apply for a personal loan to help you stay afloat. Start by calling your bank to discuss your options, and be sure to compare their personal loan rate with rates from other financial institutions. As with any major financial decision, ask about all the fees associated with the loan so you know exactly how much you’ll be paying by the end of the term. Remember that even though the interest rate may be low, this is still a debt that needs to be repaid, so take stock of your financial situation before taking on any new debt. It can be helpful to use an online calculator to estimate how much a personal loan would add to your monthly budget.
As the pandemic continues to financially disrupt the globe, it’s important to remember it’s only temporary. With so many people in the same boat, there are lifelines in place to keep you afloat right now, so don’t be afraid or embarrassed to ask for help. It’s not too late to create a plan and work your way back to financial health, day by day.