As the COVID-19 pandemic continues, many Americans face financial stress and uncertainty. Between job loss and keeping your family safe, you may feel like you’re one household emergency away from financial turmoil. If you or your spouse lost a job in the pandemic, know you’re not alone. With the U.S. unemployment rate at 6.7 percent, many families are facing financial challenges.
Right now, a broken arm or car trouble could cause major financial setbacks for your family. Perhaps you’ve already run through years of savings and there’s no money left to repair a broken heater. Sudden household emergencies can be costly, especially in an economic crisis. The good news is you have options to overcome these setbacks.
Shift your budget to survival mode.
Many Americans are struggling to pay for basic household expenses. Some rent and mortgage protections remain in place, but past due bills, shut off letters and eviction notices are piling up. Even if you’re managing to pay those bills, new medication for a sick child or outgrown shoes can be one expense too many.
Your family is also spending more time at home right now. This increases the need for fully-functioning utilities such as proper heating, electricity and internet access. Sticking to a budget may go beyond choosing needs versus wants. Instead, you may have to lower your basic expenses.
Shifting your budget into survival mode means calling your bill collectors, explaining your situation and asking for a more flexible payment plan. You might make room in your budget with small changes to your basic household costs. Maybe you can reduce medical costs with generic prescriptions or saving on groceries with a supermarket loyalty card. You can also save on clothing by shopping at thrift stores.
Depending on your income, you may also qualify for government aid. This includes Medicaid, which offers affordable health insurance, as well as programs like SNAP benefits (grocery assistance), TANF (cash grants) and housing subsidies (rental assistance).
Find ways to earn extra income.
If you’re able to take on extra work right now, some extra cash could help. Even if your basic needs are met, a lack of savings may leave you exposed to financial emergencies such as a sudden car or home repair.
If you’re comfortable working with the public, many grocery stores and delivery services are hiring right now. You can also earn extra cash by becoming a gig worker. Contract work and side hustles are keeping many Americans afloat in the pandemic. You can drive for a rideshare service, do handy work through a task app or work as a freelance writer or designer.
If you’re unable to work, think about what you can do from home. Maybe you can sell unused clothes or furniture online. Many families are in the same boat, so cheap, gently-used goods are popular right now. Or, you can host a garage sale and put your earnings into a savings account. Or try turning your hobby into extra cash by tutoring, freelance writing or selling your handmade items through an online marketplace.
Apply for a personal loan.
You can also cover unexpected expenses by applying for a personal loan that can be used as you need it — to pay for repairs, add furniture to your home office or pay off a credit card. A personal loan can help you cover a household emergency without dipping into your savings.
There are many benefits to a personal loan. To start, it allows you to consolidate your high-interest debt into one payment rather than multiple payments, and you could save hundreds — even thousands — of dollars on interest. Plus, simplifying your debt can help you stay on track during a tough time. Discover Personal Loans lets you estimate monthly payments based on your desired loan amount, repayment term and credit score.
This is a tough time for many Americans, but rather than losing sleep over a household emergency, look for creative ways to tackle unexpected expenses. The good news is you have options to cut your costs and keep your family afloat right now.
Need ideas to plan better for unexpected expenses? Read More