COVID-19 has had an immense impact on our physical well-being, as well as the economic health of individuals and families across the globe.
33.5 million Americans filed unemployment claims over the last seven weeks- marking a record-breaking high for the U.S. Department of Labor. These unprecedented numbers serve as a sign of the times, as everyone everywhere struggles to make ends meet amidst this global pandemic.
For those struggling financially, the immediate question becomes - What should we be doing now to repair finances or prepare for more bumpy roads ahead?
Step #1: Reevaluate Your Spending
Whether you’ve experienced a sudden stop in income altogether, a decrease in your paycheck or you’re now reliant on financial assistance from the government, any change in your normal cash flow is cause for a reevaluation of your spending.
While it may sound like an obvious step to take, it’s one that should be done immediately and with care. If you already have a weekly or monthly budget in place, look it over and determine what non-essential costs you could eliminate. Look for wasteful themes and identify expenses that can be eliminated. Is there a monthly subscription service that provides little value? Is there a service you are paying for where the payment can be suspended? Is takeout for every meal starting to add up? As you’re doing this, it’s important to remember: businesses you typically frequent are likely not operating anyway. If you normally budget for a night at the movies every month, weekly dinners out, etc., consider reallocating this “fun money” to cover more essential expenses. Or, you could use it to start or contribute to an emergency fund. Now is the best time to get in front of your spending habits. You may find that you were previously spending money on things that provided little to no value and now can be eliminated going forward.
Step #2: Acknowledge the Change
This is an unprecedented time, and it’s affected the lives of nearly everyone. People in a wide variety of industries - hospitality, retail, food, travel and more - have been left jobless for the foreseeable future. On top of this immense stressor, we’re all fighting the spread of a deadly virus.
If this has made you stressed, angry, sad, devastated - it’s okay. You’re human, and your reaction is justified. But when it comes to standing tall and moving forward financially, the sooner you can recognize the emotional toll these global events have had and come to terms with the “new normal,” the sooner you can begin planning ahead.
An important part of this acceptance is recognizing any bad habits you might have that are triggered by stress. This is especially true for habits and behaviors related to your wealth and health. Maybe you’re someone who likes “taking the edge off” with online shopping as a way to cheer yourself up. Whatever it may be, now’s the time to practice restraint and remember that these are emotional responses to what’s happening around you. That money may be better spent elsewhere (or tucked away in a savings account).
Step #3: Be Aware of Changing Policies
Governing bodies and private companies alike are working to accommodate out-of-work citizens. Both the United States and Canada have passed legislation in an effort to amp up benefits for unemployed individuals, and even local governments are attempting to offer relief as well. For example, some local governments have made it illegal for power and utilities to be shut off due to a missed payment during the pandemic. Others have urged landlords to halt rent payments temporarily.
Even some insurance agencies and gyms have paused memberships or reduced rates in an effort to accommodate out-of-work individuals. Write down every monthly bill you owe, and begin contacting those companies or agencies immediately. They may not have a forgiveness policy listed on their website, but they may be willing to assist you if you explain your situation - especially since so many people are in a similar spot.
Step #4: Look for Opportunities and Embrace Change
If you were feeling a sense of stress and unrest before this global pandemic, these feelings have probably been amplified. But now is the perfect reason and catalyst to look for new opportunities and embrace change. Take some time to identify areas where you can be helpful and start marketing your virtual services. Do you play the guitar? Well, can you teach guitar lessons online? Like teaching? Can you give parents a break and offer to be an online tutor? Do you practice yoga? How about organizing an online yoga group and charging for instruction? Now is the time to get creative and bring your unique gifts to the world. On the personal development front, if you've been given the gift of more time and space, now is the time to get in the best shape of your life, learn a new language, learn a new instrument, embrace a new hobby, and develop healthier routines and habits.
Feeling uncertain about the future has become the new normal amidst the COVID-19 pandemic. And if you’re struggling financially, you aren’t alone. There are resources available to you now, such as stimulus checks and unemployment insurance, to help make this time a little easier. If you’re still worried about what comes next, speak to your financial advisor or financial coach immediately. Together, you can work on developing a solid plan for moving forward.
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