As COVID-19 continues to spread worldwide, we find ourselves living a much different lifestyle than we used to. Many workers across the country and right here in Mass. have been dealt the additional blow of furloughs or layoffs. This is an uncertain time for everyone, but for those who have lost income, it could have long-lasting ramifications. April is financial literacy month and the best thing you can do to gain or maintain financial savviness is to face the problem head on. Surprisingly, this will not add stress, but will allow you to feel in control – even if the numbers seem scary at first. If you’re lucky enough to still be working and being paid, these tips can help you build up that emergency fund you’ve always been meaning to start.
Create a budget
If you already have a budget in place, you’re ahead of the game; if you don’t, then create one now. There are free apps you can use to create a budget or track spending, but a spreadsheet will work perfectly too. Create a list of your current income sources as well as all your expenses. If you already have a working budget, adjust income for anyone who has been laid off or furloughed.
Cut back on unnecessary spending
Once you have a list of all your expenses, you need to determine which of them you can’t reduce or eliminate. For example, housing costs are typically fixed and buying food will take precedence over the urge to redecorate the walls you’re now staring at all day and night. In addition to food and housing, other essential expenses may include utilities, insurance, loans and, in some situations, childcare.
Now you’ll need to find areas to trim back spending. If you frequently spend at restaurants and coffee shops, then you can easily cut those expenses while social distancing, and you’re likely saving some money by not filling up your gas tank. Cutting back your cable or streaming services might sound difficult given the fact that you’re always home, but it’s an easy way to save and with the weather getting nicer, you’ll probably spend more time outside anyway. You might find savings by switching cable providers, dropping streaming services or signing up for free trials. Some wireless carriers offer streaming services with qualified plans. T-Mobile includes a Netflix or Quibi subscription with 2 or more qualifying lines. If you can manage, canceling these services completely will likely add a large chunk of money back into your pocket.
If you haven’t reviewed your auto and home or renter’s insurance policy in a while, this is the perfect time to do so – and potentially save a bundle. Educators Insurance Agency provides exclusive service to Massachusetts educators and can help you find savings on your policy. Get a free quote.
Explore assistance programs
There are a few COVID-19 relief and assistance programs available, so research whether you qualify for any of them. The $2 trillion relief bill, known as the CARES Act, was passed in March and will provide many Americans with financial assistance. This is a one-time payment where individuals may get up to $1,200 and married couples could get $2,400, plus $500 per qualifying child, if certain criteria are met. Those who completed 2018 or 2019 tax returns and provided bank information for direct deposit are already starting to see the money in their accounts.
If you or a spouse have been laid off or furloughed due to COVID-19, expanded unemployment benefits are available under this package. Now, self-employed and part-time workers are also covered under unemployment benefits and those who are eligible will receive additional money on top of the amount they get from the state. But cash isn’t the only benefit available.
Student loan debt relief is an important component of the CARES Act. For federal loans, payments are deferred for 6 months, retroactive to March 13. That means you will not be responsible to make payments toward your student loan until September, and no interest will accrue during this time. If you’d like to continue making payments toward your principal balance, you can. Speak to a counselor from Cambridge Credit Counseling for more information on how the CARES Act might affect your student loans. Private loans are not covered by this bill.
You can also find some relief by going directly to your creditors or lenders. Many companies are outlining changes to their policies due to COVID-19 on their websites. If you hold an MTA credit card, NEA Personal Loan or NEA Savings Account, the banks are inviting you to contact them to help address your specific needs. For those with NEA life insurance policies, a grace period may be available if you’re unable to make your payment. If you’ve been laid off, you might be eligible for other benefits through the NEA Members Insurance Trust, including waived premium and the option to reduce coverage.
Bring in additional income
If you or someone else in your family has suddenly lost a job, these steps might not be quite enough to make ends meet. In this case, you might need to try to make some additional income. One of the most in-demand jobs right now is a grocery store shopper. Companies like Shipt and Instacart are still hiring for these positions. If you feel comfortable, this might be a good way to make some money while helping others who aren’t able to shop for their own necessities.
Just a month ago, creating a budget and tracking your expenses might have been something that kept getting pushed down on your “to-do list”. But now, your finances may have drastically changed due to the circumstances surrounding COVID-19 and it’s essential to make deliberate decisions about where you can spend. Being aware and in control of your money will help you come out of this as financially unscathed as possible.