Coronavirus: 7 tips to protect your financial life
As the coronavirus pandemic continues to impact the American economy, more and more individual families will begin to feel the financial effects at home.
While the government is constantly posting official announcements and policy updates — about things like the state of travel and what certain U.S. organizations and agencies are doing in response to the virus — many people are wondering how all of this will impact their financial life and what they can be doing to protect themselves.
Below are a few tips to keep your financial life in check during this unprecedented crisis.
Coronavirus: A few tips to maintain your financial health
1. Understand available government aid
The federal government has announced several new policies aimed at reducing the impact that the coronavirus will have on the U.S. economy and American families, including:
Updates for those on Medicare and Medicaid,
Cutting the national interest rate to near zero,
Declaring a national emergency,
Temporarily waiving interest on federal student loans.
The government is expected to issue new policies and measures in the coming days, so make sure to check out coronavirus.gov for the latest updates.
2. Ask for help
If you’ve been laid off or had your hours reduced at work, you may start to struggle with paying all of your bills — including credit cards, rent/mortgage, car loan and more.
The good news is that creditors have said that they are willing to work with customers who need help during this unprecedented time.
“Many banks and credit unions have stated they are willing to offer assistance to people who face temporary financial hardship due to the coronavirus,” said Jill Gonzalez, an analyst at WalletHub. “These might include measures like being able to skip a payment, having temporarily lower rates, getting fees waived or having a credit line increase.”
If you’re in this situation, call your lender’s/creditor’s customer service to discuss what’s going on and come up with a plan that works for you. Also, make sure that you know what you can realistically pay for the foreseeable future, in order to best articulate what you need from the company.
3. Review (or create) your budget
As more and more Americans are expected to face increasing financial hardship over the coming weeks and even months, right now is a great time to review your spending plan and get a good grasp on exactly where your money is going.
Here’s a detailed guide to creating a realistic budget that meets your needs and wants.
4. Drop unnecessary subscriptions
An easy way to save some cash over the next few months is to cancel any subscriptions that you don’t absolutely need.
According to a study by Waterstone Group, 84% of Americans underestimate how much they spend each month on subscription services. People surveyed estimated they spent $79.74 each month on subscriptions. But after digging into the numbers, the study showed that participants actually spent an average of $237.33 per month — a difference of $157.59.
To get a handle on your subscriptions, check out TrueBill — a service that helps you identify, negotiate and cancel unwanted subscriptions.
5. Stash away as much cash as you can
Thousands of Americans’ jobs are already being impacted by the coronavirus, with even more businesses expected to shut their doors and/or face economic hardship in the coming weeks. So, it’s a good idea to set aside as much cash as you can from each paycheck in case the virus impacts your workplace, your personal ability to work in the near future and/or causes you to incur additional medical expenses.
Having an emergency fund is always the best way to prevent further damage when you face unexpected economic hardship. Here’s how to start building your emergency fund.
6. Use credit cards, not debit
Beyond the current situation, using a credit card is typically much safer when it comes to protecting your financial information. That’s because when your information is stolen, the rules around getting your money back are much more flexible for credit cards than they are for debit cards. In other words, if your debit card/checking account is hacked, getting your money back is much more difficult — meaning there’s a much higher risk that you’ll never see that money again.
Using a credit card can also help you rack up more cash back and other rewards that may come in handy over the next few months. Just be sure that when using a credit card, you only charge what you know you will be able to pay off before the next statement date. Otherwise, you risk going into debt you can’t pay off and causing more damage to your financial life.
7. Shop for lower rates
On top of asking your lenders for help, right now is also a good time to shop around for lower rates on things like car insurance, cell phone service and more. This can help reduce the impact on your financial stability both now and down the road. Before you call, make sure you have your policy and/or current plan in front of you to ensure that if you switch plans/policies, you’re still getting the same coverage that you need.