This is an unprecedented time in world history. The economic fallout of Covid-19 has made many people realize how unprepared they were for a sudden loss of income. If you’ve found yourself in that group, it’s a scary time. When will furloughed employees be able to go back to work? Will vacation and sick days outlast business closures? Will emergency savings last? When will laid-off workers be able to go out and job hunt? It’s a scary time for lots of Americans, but we’re all in this together. Here we’re going to talk about eight strategies for staying afloat.
Try a Side Hustle
If you check out debtconsolidationusa.com, there’s an article about how, even during normal times, three out of ten Americans have to pick up a side job to cover the bills. If you’ve been furloughed or laid off, consider looking into side jobs that may not normally make it onto your radar. Virtual assistants, translators, freelance writers, and call center representatives are just a few careers that people often do from home. Consider what skills you may be able to dust off and put to use to stay afloat. Also, check your state’s workforce website. Large companies like Walmart and Amazon are experiencing a higher demand for their services due to Covid-19, and are hiring more employees to meet the demand. Walmart may not be your dream job, but it will help keep you afloat.
Put Off Paying Some Bills
According to a Consumer Reports article, many credit card companies, auto and mortgage lenders, utility companies, and even local businesses are offering special accommodations for people out of work due to Covid-19. For example, a key component of the CARES Act gives anyone with a federally backed mortgage the option of putting off interest and principal payments for up to a year. Take a look at your bills, decide which ones need to be paid with stimulus money or savings, and then see if the others can be deferred.
Consider a Personal Hardship Loan
Banks and credit unions are known for offering short term, low or no-interest loans during times of financial crisis. If you’re interested in looking into this route, financial advisers suggest talking with a bank or credit union you already do business with. They also suggest being sure you understand the loan terms so you aren’t blindsided by something unexpected like automatic repayment withdrawals.
Take Advantage of Local Aid Programs
Many communities have found unique ways to support members struggling with financial troubles related to Covid-19. From increased donations to food banks and local businesses offering everything from deferred bills to financial aid, communities are doing what they can to take care of their own. Look around your community—maybe your child’s dance studio is waiving tuition payments, or maybe your local grocery store is offering charge accounts.
Use Your Stimulus Payment Wisely
The most common way most people will stay afloat during this pandemic will be relying on the stimulus payments created by the CARES Act. Checks started going out April 17th, and by now most Americans who qualify will have received theirs. If you’ve received yours and haven’t spent it yet, here are four tips for spending it wisely.
1. Pay Bills: No matter if you’ve been laid off, are on temporary leave, or are still working with no decrease in your income, the smartest thing you can do with your stimulus check is pay bills. Take care of short-term expenses, and if you’re caught up, consider making early payments to get ahead. Auto loans and mortgages can be paid early, phone bills can be overpaid so there is a credit in your account, and insurance policies can be paid in full instead of month to month. It’s tempting to go out and spend that money, especially if you’re still working, but with an uncertain job market, no job is 100% secure.
2. Restock Your Emergency Fund: When shelter-in-place mandates went into effect, many people were temporarily laid off and forced to use their emergency savings to cover short-term expenses. If you’re one of them, consider putting your stimulus check toward restocking that fund. In the best-case scenario, you’ll be back to work with a steady income before you need to use it again. In the worst-case scenario, it’ll be re-stocked and ready when the next round of bills comes due.
3. Increase Your Savings: If your income hasn’t been affected by the economic fallout of Covid-19, and you’ve already got a decent emergency savings fund, one of the best things you can do with your stimulus money is to make sure you’ve got enough. The general rule is to have three to six months worth of basic expenses in savings. Your job may be secure now but, according to the Bureau of Labor Statistics, in March, the number of unemployed Americans rose by 1.4 million, reaching 7.1 million. If you do lose your source of income, with so many people out of work looking for jobs, it may take longer to find a new source of income. Make sure your emergency fund can keep you afloat.
4. Invest: If you’re one of the lucky ones who haven’t lost their job and has the recommended amount in savings, the next best thing you can do is invest—either in the traditional sense or in your community. If you’re well off financially, have a solid investment portfolio, and enough in savings to weather a job loss, consider putting your stimulus check back into your community. Get curbside pickup from your favorite restaurants, buy gift cards from businesses that are closed, and keep paying memberships to gyms.
For most of us, this is the first in our lifetime we’ve seen a pandemic and the economic fallout that comes with it. So, while many of us may not have been prepared, there are lots of ways to make ends meet, thanks to the motto American seems to have adopted: we’re all in this together.
