COVID-19 has hit the world hard. With over 200,000 cases in the US and counting, the public is being urged to stay in the safety of their homes to slow down the spread of the virus. And infection rates continue to accelerate, making everything feel a little uncertain.
You probably know all of this already. You’re probably trying to spend as much time at home as possible—communicating with loved ones and trying to control what you can. We’re hoping that includes your finances.
The truth is, no one can for sure say what’ll happen. But it’s important to make sure your finances are in order, to handle any emergency. At Credit.com, we want to help you prepare. That’s why we’ve compiled some information we think will be essential for you to know about finances during this pandemic.
What are the Financial Implications of COVID-19?
Unfortunately, we’re already seeing some pretty big financial impacts of the coronavirus worldwide. Unemployment rates in the U.S. are rising due to the financial hits companies are taking due to the pandemic—some officials estimate that unemployment could rise to 30%. Meanwhile, the stock market has fallen, and could continue to fall, as the pandemic progresses worldwide.
So what does this mean for you? While it’s still early, the effects will likely be far-reaching, says Rob Levy, vice president of Financial Health Network. “The requirements of social distancing will impact the vast majority of workers, resulting in layoffs, furloughs and hour reductions.”
Global News reports that in Italy, where the coronavirus has taken a major toll, 41% of those polled said they were wary of the virus’s impact on their finances. Americans should be concerned about their finances, too. “With all of this turmoil, your pre-crisis state of financial health will have a huge impact on how well you can weather the storm,” Levy says.
With everything up in the air, there are a few things that are certain: now’s not the time to panic. But it is the time to get a handle on your financial situation.
Steps You Can Take to Protect Your Finances
During such an uncertain time, it’s important to be as practical and level-headed as possible. Try to control what you can—including your finances. Here are some important steps to take to make sure you’re financially ready for anything.
1. Take a Good Look at Your Current Financial Situation—Then Budget
First things first—take stock of all your finances. What do you have in your checking account? Savings account? How about liquid assets? It’ll also be worth taking a look at your total credit limit. And if you’re able to continue working from home, don’t forget to factor in your monthly paycheck.
Once you’ve got a good idea of what your finances look like, you’ll be able to make at least a rough budget. You should be budgeting in the best of times, but it’s more important now than ever.
2. If Possible, Start Saving Now
If you got a decent-sized tax return this year and you don’t have any pressing bills to pay, you might want to put most of it in savings. One of the plus sides of social distancing is that you might spend less money. Avoiding public places means you’re probably not spending money at your typical haunts.
So try to take this time to save up a bit. Because even if you’re taking measures to keep yourself and your loved ones healthy, you never know if an unexpected medical bill might pop up. Plus, if you find yourself unfortunately laid off due to the pandemic, you’ll need a decent amount of savings.
3. Try to Find Opportunities to Bring in Extra Income
Even if you’ve got your hands full working from home, there are a few ways to make a little extra money. The reality of the coronavirus pandemic is that things aren’t really certain right now, so it’s best to prepare for any possibility.
Thanks to the internet, you don’t even have to leave your house to make some money on the side. Here are a few websites you can use:
4. Look for Flexibility from Monthly Bills
If you can’t work due to the coronavirus, Levy says it’s worth trying get a little leeway for your monthly bills. “Many utilities are offering reduced payment options. Many banks are waiving fees on credit card bills. And some landlords may even be flexible with the rent. We’re all in this together right now, so it’s [worth] asking for generosity from your billers.”
The Washington Post reports that some landlords and property management companies across the US are waiving rent for April. So it can’t hurt to reach out to your landlord and ask if they’re willing to do so. It’s also worth researching your rights and what protections have been put in place in your area.
5. Stay Healthy
You’ve probably heard this a million times already, but we cannot stress this enough—do what you can to keep yourself and your community safe and healthy. Follow CDC guidelines on how to avoid getting coronavirus.
Not only will avoiding the coronavirus help your physical health, but it could also help your financial health. “Getting the virus, even if you’re young and healthy, may come with a whole host of new medical costs or make it difficult to do any additional work,” Levy explains.
What to Do if You’re Unemployed
Whether you were already unemployed when the pandemic hit or you were laid off due to COVID-19, there are a few things you can do to help your financial situation.
In order to meet additional needs due to coronavirus, there are a few companies that are trying to fill both full-time and part-time positions. These include some pretty reputable companies, such as Walgreens, Pizza Hut and Walmart. It’s worth looking at their websites and seeing what’s available.
The US Department of Labor has an unemployment insurance program, which provides unemployment benefits to those who are eligible. And now, in light of the recent layoffs due to the coronavirus, federal law is allowing more flexibility for states to revise their laws around unemployment benefits.
Stimulus checks are given by the government to taxpayers to help boost the economy. However, in order to meet the financial crisis most Americans face due to coronavirus, the Senate has voted for a stimulus package to help people during the pandemic, according to CNN.
According to Vox, the stimulus package would provide each adult with $1,200, and $500 would be given for each child. But if your income is higher, your check will likely be smaller. Since we’re still waiting for Congress to pass this legislation, there’s no news on when that’ll be available.
Don’t Panic—But Do Prepare
We can’t stress this enough: preparation is everything. And it’s never too late to start preparing. For more financial tips, check out our Personal Finance Learning Center.