If you’re worried about money, it’s completely understandable. When the year started, stocks were trading at all-time highs while unemployment was at historic lows. That’s changed faster than we could have anticipated, and it’s unclear what the next few weeks and months will hold. While we wait to see what will happen next, it’s a good time to evaluate your finances and prepare for what lies ahead.
First, take a look at your budget. Developing a budget, and sticking to it, is one of the best things you can do for your financial health. A budget doesn’t have to be complicated or time consuming – you can use an app, Excel spreadsheet, or pencil and paper. The key is understanding what’s coming in/going out. Seeing this can help you assess your situation and create a more effective game plan.
Review your expenses. This is the perfect time to request a loan review with a lender you trust. Next, take a look at your credit card balances – if you can pay them in full, that’s great. Otherwise, consider a balance-transfer card. Many offer a lower introductory rate and “skip payment” options. While transferring a card balance has pros and cons, it can save you money and buy some time.
Breaking down your other expenses into needs vs wants can be very useful. Utility bills (electricity, gas, and water) are generally needs, as opposed to wants like cable television or a gym membership. Determine if there are areas where you could cut back, and develop a game plan in case this becomes necessary.
Now look at any money you have on hand. Even before the pandemic, nearly 40% of Americans weren’t able to pay for a $400 unexpected expense. No matter where you are on the savings spectrum, you should take steps to conserve cash and build savings. Determine how you can avoid spending the cash you have if possible.
If you’ve been laid off or let go, don’t hesitate to file for unemployment coverage. As you’ve likely seen, demand is high and that can delay response time. Even if you won’t be eligible for a few more weeks, review the process to determine the requirements and items/paperwork you’ll need to have available.
At this point, most of your work is done. You’ve identified areas where you can save money and should have an idea of whether or not that will be enough. If you expect to have a problem paying your bills, reach out for assistance now. While contacting creditors and service providers isn’t anyone’s idea of a great time, you’ll feel like the weight of the world has been lifted when you’re done. Many companies are offering hardship programs and numerous lenders – credit cards, student loans, etc – are waiving interest and other fees. While each company will have its own requirements, in general it’s a good idea to prepare what you want to say about the following before you call:
Your financial and employment situation
How much you can afford to pay
Your income and expenses
When you anticipate being able to make regular payments
Finally, it’s a good idea to watch the local news, read area papers, and network as much as possible. There are many resources available for dealing with financial problems due to COVID-19, and more are being introduced, but you need to know they exist. You’ll want to take advantage of as many as possible, though do be careful if a program sounds too good to be true or if it just doesn’t feel right – unfortunately, there are many out there looking to take advantage of those in need.
The views, information, or opinions expressed in this article are solely those of the author and do not necessarily represent the views of Citizens State Bank and its affiliates, and Citizens State Bank is not responsible for and does not verify the accuracy of any information contained in this article or items hyperlinked within. This is for informational purposes and is no way intended to provide legal advice.