Financially Impacted by COVID-19 – Now What?
Within the span of only a few weeks, a microscopic virus most of us had never before heard of managed to drastically change the lives of millions of people around the world. People have suffered, people have lost their lives, and countless lives have been altered in a myriad of ways, including financially.
If you’ve been affected by the economic impact of the novel coronavirus (aka COVID-19) and are struggling to make ends meet, you may be asking yourself, “Now what?” For those who have lost jobs, income, savings, and more, there are no easy answers. And everyone’s individual path will certainly be different. But, if you’re looking to get your bearings, here are a few options you might consider as you navigate your way through this crisis.
Look to the Government
No matter what your opinion of the government, during times of crisis, it is the government’s job to take the lead in offering citizens some relief. At the time of this writing, the federal government has passed a two-trillion-dollar economic relief package to help millions of Americans affected by the coronavirus pandemic.
The U.S. Treasury Department and Internal Revenue Service have extended the filing deadline for federal taxes and payments from April 15, 2020 to July 15, 2020 to offer some relief as well. Things are in flux and continually changing, but for the most up-to-date information on coronavirus tax relief, click here.
If you’ve lost your job due to the coronavirus, you may qualify for unemployment benefits. Unemployment benefits and policies vary from state to state, so be sure to check out your state’s policies if you plan to file for unemployment. New guidelines have been implemented since the coronavirus outbreak, providing states with more flexibility in implementing their unemployment insurance programs.
If you own a home, there is mortgage help in the works, but know that, like unemployment benefits, it varies from state to state, and there are many different rules in play that are changing with the circumstances of the pandemic.
A lot of things are in motion at the time of this writing, so try to stay as informed as possible. You can stay on top of federal government responses to the coronavirus by visiting USA.gov/coronavirus. For information on any relief or programs through your individual state, start by visiting your state’s official website.
It’s worth mentioning—and obviously easier said than done—to try to be patient as you explore options available through the government. Remember that millions of folks are in the same boat as you and are scrambling to make ends meet as well. Expect web traffic to be high, phone lines to be busy, and wait times to be longer than usual. Exercising a little patience and taking a few deep breaths could help make the process a bit more tolerable.
Talk to Your Creditors
If you owe money and are going to have a hard time making a payment, let your lender know. Most companies understand the hardship this pandemic has caused, and many will be willing to work you—especially if you’ve previously been making consistent on-time payments to them. Many companies are offering payment relief programs to their customers.
Even if your lender isn’t offering any sort of relief, it never hurts to talk to them and make them aware of your situation. Believe it or not, your creditors would prefer that you get back on track and continue to make payments rather than default, so they may be willing to work with you. Plus, the person on the other end of that line is first and foremost a human being who’s likely been affected by the pandemic as well. And it never hurts to ask—the worst they can do is say no.
Cut Costs Where You Can
Cutting expenses may not immediately get you funds to help pay your bills, but it will, at the very least, slow the outflow of your funds. Unless you’re already living a Spartan existence, most of us have some fat we could trim from our budgets. Things like multiple content streaming services when one would probably suffice. Or eating out (or eating take-out during quarantine) instead of cooking meals. Or online shopping for stuff we don’t really need, especially if we’re doing it to make ourselves feel better during this crisis.
In an emergency, every little bit helps. Plus, actively getting into a saving mindset could open the door for other savings opportunities you might otherwise miss.
Seek Temporary or Additional Work
Along with cutting back expenditures, an influx of income could offer some relief. While countless jobs have been lost as a result of the coronavirus, the virus has also created jobs in multiple sectors, with the healthcare industry leading the way.
If taking on a new job during COVID-19 or working overtime at a job you already have isn’t an option, perhaps you possess a unique skill or hobby you could monetize as a side-hustle or even a fulltime gig. Starting a new business is never easy and can be risky, especially in the gig economy, but if you’re out of work or need to supplement your income, there are few better motivators to work hard and strive for success than necessity. And, as the saying goes, “necessity is the mother of invention.”
Sell Some Assets
With hard times come hard decisions, including parting with material goods that could supplement your income. Got two cars but could probably get by with a single vehicle? Consider selling one. Got a coin or stamp collection you’ve been holding on to for a rainy day? Well, consider the coronavirus pandemic a monsoon.
Ultimately, possessions are just things. Unless they hold great sentimental value or are a precious family heirloom you plan on passing down through the generations, if selling them could provide some relief, consider doing so.
Seek Help From Family & Friends
This can be tricky because, if things go south, it could strain or even end a relationship. But desperate times sometimes call for desperate measures.
First, the good news. Your family and friends love you, so if they were to give or lend someone money, why shouldn’t it be you, someone they care about? If you’re lucky enough to have family or friends who volunteer to give or lend you money, if you’re comfortable taking it, and it’ll help, then consider doing so. It’s certainly easier than applying for a personal loan—and hopefully the terms will be more favorable.
If you are broaching the subject of a loan with friends or family, make the transaction businesslike. Consider offering them a written contract and a payment schedule to put their minds at ease. And be prepared for an answer of no. It’s possible that your family or friends were hit just as hard or harder by this pandemic without your knowledge.
Apply for a Loan
If you can get out of debt without taking on more debt, try to exhaust those possibilities first. But if you have to, and you qualify, taking out a personal loan or a home equity loan or line of credit could help get you through tough times.
Try to avoid payday or other short-term, high-interest loans. These types of loans could end up causing more harm than good.
Keep the Faith
If ever it all seems too much, remember the Persian adage, “This too shall pass.” Or, if Greek philosophy is more your thing, “Change is the only constant in life.”
The point is that nothing in this life is permanent, including financial repercussions from this pandemic. Look to others for help when you can, but never stop believing in yourself.
About the author:
After realizing he couldn’t pay back his outrageous film school student loans with rejection notices from Hollywood studios, Sean focused his screenwriting skills on scripting corporate videos. Videos led to marketing communications, which led to articles and, before he knew it, Sean was making a living as a writer. He continues to do so today by leveraging his expertise in credit, financial planning, wealth-building, and living your best life for Credit One Bank.
