With the rapidly changing environment, it’s best to deal with changing circumstance in a proactive and intentional manner. Here are some financial considerations for the weeks ahead.
Now more than ever, it’s important to review your budget. Identify income, list expenses, build a plan for the upcoming weeks as much as you can, and adjust where needed. As you go through this process, look for non-essential expenses you can do without temporarily to give your budget some breathing room.
Parents and employees in certain industries are already feeling the effects of COVID-19. If you’re on a reduced income, there may be a need to prioritize bills – food, housing, utilities, insurance, and other essentials.
Travis County, among others, have announced a number of orders going into effect to assist the public. The orders involve temporarily halting utility disconnections and evictions, special housing assistance, food assistance, and more. Reach out to providers to obtain the most up-to-date information.
If you are unable to pay creditors, find out if you can change your due date, use skip-a-pay, or work out a payment plan. If you have federal student loans, you may seek temporary relief by switching to an income-driven repayment plan or applying for forbearance.
It’s important to decide what situations would constitute an emergency and subsequent withdrawal from savings. While this may vary from person to person, events such as a job loss, unexpected medical expense, and surprise car repair often make the list.
If you or your spouse experience a job loss or reduced income, how long would you get by on said emergency fund should you need to use it? Suppose you have $10,000 and experience a loss of $1,500 monthly; you know these funds will help you through about 6-7 months. Reduce expenses or supplement income to stretch that further.
If you are able to supplement income, there may be opportunities that arise as a result of COVID-19. Amazon and HEB, for example, recently announced they will be hiring temporary staff to keep up with demand. A need in other areas may arise too; this may include healthcare, child care services, remote tutoring, cleaning services, etc.
If you can avoid it, refrain from adding new debt. In these difficult times, we must all keep the long run in mind. Any debt we take on, will have to be repaid at some point. This means future income will be committed to paying new obligations.
Your first course of action should be to reduce expenses. If you absolutely have to borrow in the short-term, consider your options. It’s best to borrow using the option that provides the best overall terms – interest rate, time to repay, lowest fees, etc.
Compare options and overall costs using our loan calculator.
Free Financial Coaching
Our partner, BALANCE, is ready to serve should you need to speak to a financial coach. Services are provided at no cost to you. Coaches can assist with building a budget, debt repayment strategies, foreclosure prevention, student loan coaching, and more.
To speak to a financial coach, call toll-free 1-800.777.PLAN (7526). Monday–Thursday 9:30 AM–8 PM, Friday 9:30 AM–7 PM, Saturday 11 AM–4 PM (Central Time). Multilingual representatives are ready to assist.