5 Steps to Prepare Yourself Financially for the Uncertainty of Coronavirus
The coronavirus (COVID-19) continues to spread and is now considered a pandemic. People are scrambling to gather essentials for their homes and are on high alert wondering how this situation will continue to evolve and what effects it will have on the economy, work and the coming months. Unfortunately, it’s unpredictable how exactly everything will pan out but one thing’s for sure, is it is wise to prepare.
As we prepare for more school closings, businesses and mandatory working from home, here are some steps you can take:
- Contact your creditors as soon as possible. If you anticipate the inability to make your monthly credit card payments, it’s important to open that line of communication. Ask for temporary hardship concessions like interest-only payments or forbearance.
- Keep priority obligations on track. First and foremost, it’s important to pay your rent or mortgage. If you experience loss of job or income, be sure to maintain open communication with your creditor or landlord.
- Develop an emergency spending budget. This is a leaner much stricter version of your budget. Pause all “fun budget categories” like dining out, extracurricular activities, anything that is more of a want than a need. Set a realistic budget for utilities and food expenses. Make a list of all your current obligations. Circle the things that are wants so you can see how much you could realistically save if you pause subscriptions, limit travel and make affordable meals at home.
- Identify community resources and if there are any government assistance programs available. Government officials are still working through what options and if there will be opportunities for health care reimbursement established in the coming days. Communities agencies may help with food banks, temporary assistance with utilities, etc.
- Reach out to a nonprofit financial counselor to find ways to eliminate debt and reduce financial obligations. Debt is often the roadblock that keeps people from being able to establish financial stability. According to CNBC, the biggest hurdle that is causing people to live paycheck to paycheck and preventing them from building an emergency savings fund is debt.
If you have limited resources and not much in a savings account, you are not alone. About 40% of Americans say they don’t have $400 available to cover unexpected bills. With so many living paycheck-to-paycheck, even missing one paycheck could lead to financial struggle.
Now is a good time to prioritize paying down debt to the best of your ability because interest rates are typically highest for revolving lines of credit. To do so, The NFCC is here to help! Our nonprofit credit counselors are on standby to help you strategize and figure out the best way to make it through this uncertain financial season. Amid trying to stay healthy and manage your households, it’s important to not have the worry and stress of debt.
