7 Actions to Take During Financial Hardship
I think we are all in agreement about this -our sense of normalcy has shifted. From life in yoga pants to zoom calls dominating our social life to Houseparty games to quarantine memes or not being able to see our loved ones as we social distance. Layoffs, furloughs, unemployment numbers are unfortunate but common news in our day. As we navigate the health crisis brought by Covid-19, financial insecurity is impacting so many of us. Now more than ever we need a financial action plan. If your income has been unaffected read this instead.
For me, I have links bookmarked to watch the daily briefings from either the Mayor or Governor and keeping up with all the memes. At one point, you may have been like me and craved to work from home with more freedom than you had and now, seven weeks in, most of us are sick of it and while we do our part to stay home and stay safe, we are anxious for things to get back to ‘normal’. Oh and did you know, WFH also stands for Wine From Home? At the back of our minds is this lingering thought “how are we going to financially survive this?” Take these seven tips to help address your current situation and once things settle down, go here for steps to your next financial action plan.
1.TAKE FINANCIAL INVENTORY #1: Understand Your Need
What is the bare minimum amount needed each month to keep your household (business) running? The number that will just keep the lights on. You may already have a regular budget but this is your barebones (doomsday) budget. Take your previous month (before financial hardship) bank/ credit card statements and go through it line by line. Separate each expense into ESSENTIAL (expenses like rent, food, utilities) or NICE TO HAVE expenses (like subscriptions, eating out or in this case take-away, etc). With the nice-to-have expenses further categorize them into Cut back, Pause, or Cancel.
2.TAKE FINANCIAL INVENTORY #2: Evaluate Income Sources
What income sources do you have available that don’t rely on your job (business revenue) e.g. your cash reserves aka emergency fund, rental property income, a working spouse, grants, stimulus money, unemployment benefits? Apply for unemployment immediately to ensure that you get your check as soon as possible.
3.Pay off Your Debt
Even in good economic times, it is always best to reduce (eliminate) your debt. This frees much needed cash that you can use for your day-to-day expenses or invest in your future. 13 % of American’s aren’t saving more because of the amount of debt that they owe. Your goal should be to eliminate high-interest debt such as credit cards. A powerful tool that you have at your disposal is the ability to negotiate. Reach out to your credit card company or loan providers and request a new payment plan.
“THE ANSWER IS ALWAYS NO UNLESS YOU ASK.”
4.Get Financial Help
Here are some resources you might want to look into. The suggestions are in no way exhaustive and some only apply to the COVID-19 national emergency.
Help with bills: needhelppayingbills.com OR findhelp.org OR Temporary Assistance for Needy Families “TANF” by State
Student Loans Relief: Federal student loan payments have been put on automatic stop from March 13 to September 30, 2020. You can still choose to make payments if you want.
Mortgage Relief: Under the CARES Act, if you have a federally backed mortgage, contact your loan servicer to request a forbearance for up to 180 days. You also have the right to request an extension for another 180 days. You are also protected from foreclosures for 60 days after March 18. Look here to find out if your mortgage is federally backed. If they’re not, contact them anyway to see if they’re offering something similar.
Rent Relief: Also under the CARES Act, tenants who live in buildings bought with federally backed mortgages are protected from eviction through July 25, 2020. Check with your specific GOVERNOR’s office for provisions specific to your state.Check out the Families First Coronavirus Response Act for specific provisions related to COVID-19. These provisions will be in effect until December 31, 2020.
5. Consider Picking up a Side Hustle
Look into work projects that you can do from home like becoming a virtual assistant, transcribing, or even proofreading. Consider something that you might do evenings or weekends so you keep at it even when the stay-at-home restrictions are lifted.
6.Update Your Resume and Start Networking
Make use of this downtime at home to start looking for a new job and building relationships and connections with others online, particularly on LinkedIn. The default might be to connect with people in HR or Managers but consider people holding your dream position or those who work in your dream company. After you connect with them, request a 15 minutes conversation to discuss what is like to work in that company or position. Some companies have employee referrals so when a position in their company opens, you can now reach out to a warm connection to ask them to recommend/ submit your resume. A point to note: Networking is not only about what you can get out of a connection, be thinking about what you are bringing to it.
“NETWORKING IS NOT WHAT YOU KNOW… NOT WHO YOU KNOW… IT’S THE VALUE YOU CAN BRING TO WHOM YOU DON’T KNOW.”
TRENT SHELTON
7.Learn Something New
A great investment that you can make in your life is education. Take this downtime to learn something new or build on your current skills by taking some CE (continued education) credits. Maybe it’s a new field/ skill you’ve wanted to get into but did not have the time. Maybe it’s a new hobby you want to try. I know I’ve always wanted to try hand-lettering or calligraphy but keep putting it off. There is a lot of free education available online like this.
Most of all take heart knowing that you are resilient! Things will get better! The economy will eventually rebound! I’m here cheering you on always.
