4 Tips for Weathering Financial Hardships During COVID-19

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shutterstock_1658325691.jpgAs COVID-19 continues to take the world by storm, many Americans are still facing financial headwinds due to the prolonged crisis. 

 

 “Some families are experiencing tough situations,” says USAA advice director Mikel Van Cleve. “When you’re in the middle of a financial crisis, the next steps aren’t always obvious.”

 

While talks of a second relief package are underway in Washington, USAA has taken action to provide financial relief and advice. Read on for practical tips on moving forward in the wake of financial uncertainty.

 

  1. Explore options for financial relief.

If you’re facing extended unemployment and aren’t sure how to make ends meet, remember that food, water, and shelter are your basic needs. Payments for these services must come first to safeguard the health of yourself and your family. As you prioritize your monthly bills, check with your financial institution to see if there are opportunities to help alleviate or postpone payments.

 

“USAA has encouraged members who’ve been financially impacted to reach out for help,” says Van Cleve. 

 

Van Cleve also suggests calling service providers to explore potential fee reductions or discounts. “And if you owe medical payments, call your providers to see if you’re eligible for reduced service costs,” he says.

 

If you’re looking for temporary work for this window of unemployment, some industries are hiring. Consider exploring Glassdoor, which has a list of COVID-19 job resources by state, or other similar job recruiting sites for further information.

 

Additional resources may include:

Here’s the bottom line, Van Cleve says: Cut out any unnecessary expenses, and explore government or community resources to help you pay for basic necessities. “If you need help, do not be embarrassed or ashamed. Utilize available resources to make it go as far as possible.”

 

  1. Review or create your budget.

A budget gives you control over your money as you navigate through life. Now, as many people are feeling job uncertainty while simultaneously facing unexpected medical expenses and other costs, it’s an ideal time to pause, revisit your budget, and make some strategic decisions. You may even find that some expenses have gone down while staying home, such as money normally spent on gas and entertainment.

 

“If you don’t have a budget, see if your Bank has a tool to help you start from scratch, whether you prefer online tools or old-fashioned pencil and paper,” says Van Cleve. “Once you see all your expenses in one place, you’ll have a better idea of areas where you can tighten your belt in order to pay for necessities. USAA offers both an online budget tool and a budget worksheet.

 

Ready to start? With the worksheet as your template, follow these steps:

  • List every expense that you have.
  • Review and prioritize those expenses.
  • Determine what you can or cannot live without.
  • Compare the remaining expenses to your income.

Once you’ve established your budget, monitor your spending to ensure you stay within your income limits. “Our online tool can really help with that because it syncs directly to your accounts and gives you a snapshot of your spending across all your different accounts,” explains Van Cleve. “You can also view your spending by category, and adjust the target spending amount for each category.” With many budget tools, you can get an alert to notify you when you’re close to reaching your target spending amount.

 

  1. If possible, contribute to your emergency fund.

If you are fortunate enough not to have seen any impacts to your income level, your monthly budget should allow you to set cash aside in an emergency fund. “Particularly when the threat of unemployment or rising medical cost increases, it may feel impossible,” says Van Cleve. “With all the uncertainty, keeping your emergency fund stocked with at least $1,000 is one of the most important steps you can take.”

 

  1. Stay the course.

When it comes to your finances, fear and panic are often the biggest threats. If you feel waves of anxiety — which are only natural — just look at these important financial resources. And instead of making any reactive changes to your accounts, revisit your financial plan, designed to provide stability.

 

 

USAA believes the websites and resources used to gather this information are reliable; however, we cannot guarantee the accuracy or timeliness of the information.

 

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