As COVID-19 continues to take the world by storm, many Americans have been dealt a swift and sharp financial blow. Every day, a growing number of businesses defined as “non-essential” are forced to close their doors, leaving a wake of workers applying for jobless benefits.
In other industries like construction and manufacturing, many employees who have been fortunate enough to keep their jobs are now furloughed or have been asked to take drastic pay cuts. “Some of our members are experiencing heartbreaking 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.”
To help its members weather this storm, USAA has taken immediate action to provide financial relief and advice. Read on for practical tips on moving forward in the wake of uncertainty.
1. Explore options for financial relief.
If you’re facing 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 is encouraging 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.
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.”
2. Review or create your budget.
A budget gives you day-to-day, tactical guidance as you navigate through life. Now, as many people are feeling job uncertainty while simultaneously facing unexpected medical expenses and other supplies, 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.
3. Revisit — or create — your personalized financial plan.
A financial plan doesn’t have to be complicated; it’s a simple document that identifies your goals and maps out how you’ll achieve them. But in times of economic uncertainty, it’s a guidepost that offers perspective, encouragement, and direction.
“When you have a financial plan, we account for times like these,” Van Cleve says. For example, if your retirement is decades away, you can look at your plan and understand you have time for the market to recover. On the other hand, if your retirement is approaching in the near future, your plan should account for that, with less of your money at risk of market fluctuations.
“More than anything, this recent market volatility drives home the importance of aligning where you put your money with the time horizon for when you’ll need it,” Van Cleve says.
If you don’t already have a financial plan, it’s not too late to make one.
4. If possible, contribute to your emergency fund.
If you are fortunate enough to have not 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.”
If you’re looking for temporary work for this window of unemployment, some industries are hiring. According to data from the recruiting site Glassdoor, the top five roles with the most coronavirus-related openings include registered nurses, communications associates, social workers, project managers and technicians.1
5. 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 take a look at these important financial tools. 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.