COVID-19 has negatively impacted the world, as many businesses and companies shut down. Unfortunately, the first thing companies do during an economic turndown to reduce costs is to lay off staff. New research shows that more than 3 million Americans are now unemployed, and the claims for unemployment benefits have risen to 281 000.
Therefore, apart from concerns about social distancing and self-quarantine, you’re most likely experiencing financial stress after your loss of income. Here are some tips that can help you manage your finances better during this pandemic.
- Contact your creditors, lenders, and landlords to discuss options
First, contact all your service providers from your landlords, utility companies, to your lenders and your mortgage company and inform them of your unemployment status. Most service providers are working with clients through this time to find a suitable paying plan that fits their current budget.
Services providing property management in Indianapolis and other cities are being overwhelmed with tenants who can’t pay their rent. Luckily, they’re working with tenants to come up with a relief plan and term for making their payments. For example, some service providers require you to pay back your deferred mortgages in one lump sum once you’re back on your feet. Before agreeing to any repayment plan, it’s vital to understand how and when your provider expects you to pay back.
- Apply for unemployment benefits
Even if you would never have applied for unemployment benefits before, now is the time to file your claim. Many people assume they don’t qualify for these benefits. But, the Department of Labor came up with new guidelines that provide flexibility for workers impacted by the coronavirus.
The new unemployment benefits law also expands benefits to part-time employees, freelancers, gig workers, and unemployment contractors. However, file your claim as soon as you can and ensure you fill it with the state where you were employed.
- Downsize
You’ll need to cut down on your spending habits once you lose your source of income to save more money. Begin by writing down exactly how much money is coming in each month, which bills you have to pay and when they’re due, and how much money is going out. Additionally, review your subscriptions, delivery services, and memberships.
For instance, you can cancel your gym membership now that you can’t go to prevent the spread of COVID-19. Also, cut down on online shopping and cook meals at home instead of ordering in, since it’s less expensive.
- Review your health insurance options
49% of Americans receive health insurance through their employers, and being laid off means you have to pay for your insurance. While you can continue using the same plan you had under your employer, you will have to pay your premiums fully, and this can run up to $7000 per year for a person.
Luckily, you can look for affordable options on the health insurance market or use your parents’ plan if you’re under the age of 26.
- Get help if you need it
Some credit unions and banks are providing emergency loans to help you as you wait for employment or for your unemployment benefits to kick in. When looking for a loan, you want an affordable interest rate that is no more than 36% and has a reasonable repayment period.
Planning your finances and expenses is key to surviving the COVID-19 pandemic.
