Right now, you are not alone if you feel crushed under the weight of economic uncertainty. The coronavirus outbreak has thrown a sizable wrench into many people’s financial plans. You might find yourself out of work, or if you still have a job, you could fear how much longer you will hold on to it.
Take a deep breath and collect yourself. As tough as times are, you will survive. Start taking these proactive steps now to protect your money as much as possible.
Increase Your Savings If You Can
Now is not the time to plan a vacation — even if you find yourself with time on your hands. Redirect any extra monthly income toward padding your savings. Identify ways that you can save. For example, if you typically pay for a gym membership, your facility is likely closed. Can you pause your membership to save on the monthly fee?
Consider the benefits of not being able to attend concerts or go bar-hopping with friends. Redirect your entertainment budget to increase your savings. If you don’t end up needing the money, you can always treat yourself when circumstances return to normal.
Adjust Your Monthly Budget
Now is the ideal time to redesign your budget. Start by adding up the income and expenses that you have every month. Necessities include things like rent, utilities and food. This computation lets you know how much extra you have.
Then, monitor your spending and readjust it every month. Many financial institutions offer budget tools that separate debit card purchases by category. If you find that you spend more than planned on food, can you save more by using coupons or buying generic brands? You do want to support struggling restaurants in your local community during this time of hardship, but do you need to order takeout as more than a once-per-week treat?
Cancel Unwanted Subscriptions
Like it or not, we live in a subscription society. Free trial offers sound terrific until you forget to cancel. While some credit cards now require merchants to notify you when a trial period ends, not all do. Before you know it, those bills can add up.
Go through your credit and debit card statements and look for recurring charges. Alternatively, you can use an app like Trim or Truebill to help you identify and eliminate unnecessary subscriptions.
If you have several credit cards, the interest and fees you pay can add a ton to your annual budget. Right now, your priority should be eliminating as much debt as possible, so investigate your options for consolidation. You can often find loans that offer a substantially lower interest rate than what you pay individually, plus, you’ll eliminate multiple annual fees if your cards charge them.
Negotiate With Your Lenders
Did you lose your job due to the coronavirus outbreak? Your lender may be able to help. Right now, many major credit cards are offering interest-rate reductions, lower minimum payments or extended payment deadlines. Even a savings of $25 to $50 per month can make the difference between paying your water bill or not.
Furthermore, if you lost your income and you have student loans, contact Navient. You can apply for income-based repayment plans that can lower your monthly bill to $0. The elimination of this monthly payment can save you a bundle during tough times.
Pay High-Interest Debt First
When you establish a plan to tackle your debt, focus on the card or loan with the highest interest rate first. This process will save you the most money in the long run. Typically, the cards with the steepest rates also have the most stringent conditions when it comes to reducing interest rates or lowering monthly payments.
Investigate Side Hustles
In addition to curbing your spending and reducing debt, you can identify ways to increase your income. Right now, there is a lot of competition for work-from-home positions, but if you have excellent time management and organizational skills, you can make your resume stand out to employers.
Other ideas for making work from home include selling crafts on Etsy — you have time to finish that quilt now. You can also start a YouTube channel doing anything from yoga to giving guitar lessons or offer consulting services if you have sharp business acumen.
Sell Unnecessary Items
Finally, since you have more time at home, why not clean out your closets? You might be stunned at what old games and toys can net you on eBay, especially now, as parents scramble to keep their children busy. While you can’t hold a yard sale due to social distancing rules, you can create a pile that you can peddle at a later community-wide one. Chances are, several of your neighbors are thinking along the same lines, after all.
You can also gather old electronics that you no longer use. Many pawnshops will pay a considerable amount for in-demand items like iPhones. While you might not be able to make a deal now, you can use the money later to help you recuperate.
Manage Your Debt During Quarantine With These Tips
Millions of Americans feel financially unstable due to the COVID-19 outbreak. However, by taking the measures above, you can minimize the pinch.