Over 10 million Americans have already lost their jobs and filed for unemployment as a result of COVID-19 (also known as Coronavirus). Experts estimate that losses could grow as high as 47 million in the next several months, which would lead to an unemployment rate of 32 percent.
Do you have concerns about how an economic recession in 2020 could affect you? Even if you haven’t lost your job, you’re likely still worried about your finances.
How to Manage Your Money
Listed below are helpful tips on how to manage your money better during and after the Coronavirus pandemic.
Create and Stick to a Budget
One of the best things you can do to manage your money and weather the storm of COVID-19 is to create a budget. This is especially important to do if you don’t already have one in place.
Sit down and take a look at your monthly spending. Use your bank or credit union’s online banking feature to figure out how much money you’re spending relative to what’s coming in.
Based on your income and non-negotiable monthly expenses (this includes things like rent and utilities), put together a budget so every dollar you earn has a specific job. Once you’ve created a budget, be sure to stick to it. You may want to use a money-tracking or budgeting app to make this easier and help you stay focused on your specific financial goals.
Trim Your Spending
While you’re going through your bank account and taking a look at your spending, you’ll likely notice that you have some unnecessary expenses that you can get rid of. This might include things like fast food or food deliveries (a lot of us are leaning a little too heavily on DoorDash and GrubHub right now), or you might be spending a lot of money on subscription services.
If your income has shrunk or disappeared altogether, or if you just want to be prepared in the event that it does, now is a good time to look for ways to cut back on unnecessary spending. Maybe you need to limit your food deliveries to once per week or once per month, for example, or you might need to downsize to one streaming service instead of three or four.
Build Your Emergency Fund
If you’re fortunate enough to still have a job and a source of income right now, you ought to be diverting as much money as you can to your emergency fund (while still paying all of your bills, of course).
Making an effort to build an emergency fund now could be a lifesaver in the future. It’ll help you ensure that you have enough money set aside to continue paying your rent or mortgage.
Be sure to prioritize saving as much as you can even if you’re also working to pay down debt. When you’re putting together your budget, figure out how much money you can comfortably set aside while also paying off debts in the most efficient way possible. Even if you can only save $50 or $100 per month, that’s better than nothing at all.
Talk to Your Lenders
Speaking of debt, don’t be afraid to talk to your lenders. Lots of people are struggling financially right now, and financial institutions have been encouraged to work with their customers. They might be willing to waive late fees, for example, or allow you to skip payments for a few months.
When it comes to talking to your lenders about your current financial situation, it’s important to get ahead of the issue. Don’t wait until you’re already several months behind on your mortgage or car loan to reach out. Contact them as soon as possible so you can figure out a plan that works for them and for you.
Consider Unemployment Benefits and Insurance
If you lose your job during this time, reach out to your state’s unemployment office to learn about the options available to you. Be sure to call even if you have concerns that you won’t qualify. Benefits have expanded in response to the coronavirus outbreak, and many people, including independent contractors and self-employed individuals, now qualify for assistance.
You may also qualify even if you haven’t lost your job. For example, if your employer has stopped operating temporarily or if you’re quarantined and deemed a nonessential worker, you may still have access to certain benefits. This is also true of people who have had to leave work to care for a sick family member.
Apply for Aid
There is additional aid out there for which you can apply, too. Many organizations have put together funds to help those who work tipped jobs (servers, bartenders, hairstylists, etc.) get through this difficult time, for example.
The U.S. Bartenders Guild National Charity Foundation also launched an emergency assistance program to help out-of-work bartenders and their families. Do some research to see what kinds of charitable programs are available in your area, then reach out to see if you qualify for aid.
Diversify Your Income
In addition to budgeting and saving money and applying for aid, another good step to take right now is to diversify your income. Even if you still have a job, you would do well to look for other ways to bring in additional funds.
Consider taking on a food delivery gig through a company like GrubHub a couple of nights per week to bulk up your emergency fund, for example. You might also want to look into offering specific services like editing or copywriting on a freelance basis using an app like Fiverr. There are lots of ways to bring in a little extra cash right now, and every little bit will help.
For even more ideas, check out Thinkflow for 90+ jobs and gigs you can start right away, with many of them online.
You Know How to Manage Your Money: Now What?
Now that you know more about how to manage your money during this current crisis, as well as moving forward, it’s time to take action. Follow the steps outlined above and you’ll have a much easier time keeping control of your finances and weathering this storm.
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