Financial issues are a great concern to many people right now. Whether you have concerns about losing a job or other source of income, or just want to plan for the future in uncertain times, these money management tips can help.
The first thing to embrace is we are in this together- millions of people are out of work and businesses of all sizes are facing uncertain futures. We don’t know what our country’s long-term horizon holds. Well, we can’t control the national economy, but you can take small steps to feel more in control of your personal financial situation.
Track your spending
Getting a handle on your spending is really important whether you’re saving for the future or responding to a loss of income due to the coronavirus. Small purchases add up, and it can be eye-opening to see the total cost of convenience and entertainment items like takeout meals or streaming services over the course of a month.
Duke University’s personal finance website can walk you through the steps to get started with your budget, and it also offers free worksheets and recommendations on safe budgeting apps.
If you’re totally new to budgeting, the Federal Trade Commission covers the basics here, and it’s an excellent way to learn more and get started.
Save what you can every month
Taking control of your finances and putting money into savings each month — even if it’s a small amount — can provide a cushion during economic downturns, according to the Consumer Financial Protection Bureau (CFPB).
Setting aside money every month can be as simple as instructing your employer or your bank or credit union to automatically transfer a set amount to your savings every month. Beyond that, this might be a good time to take a closer look at your expenses and spending habits and see where you could make some cuts. You can use pencil and paper or choose from any number of apps that can not only help track your spending but also monitor your credit score and send reminders when bills are due.
For tips on how to save and strengthen your financial resilience, see the CFPB’s post on staying on top of finances during COVID-19.
Utilize debt-management tools
Money can be a major source of stress for many of us, even in the best of times. With millions of people newly unemployed, debt is becoming an even more pressing issue.
If you’re suddenly faced with unpaid bills or new debts related to unemployment, you may be feeling overwhelmed or anxious. You might tamp down some of your anxiety by lassoing fears about money into a simple action plan, according to the CFPB. If you are employed, you might familiarize yourself with the unemployment benefits and application process in your state so you feel prepared should you need to apply.
When and if you’re able, adopting debt-management tools can help you prioritize bills to ensure those related to basic needs are paid first. These types of tools also allow you to track what you owe and when you can make payments.
A good place to start is your credit cards, as they often come with high interest rates. If you’re paying a high interest rate on credit card debt, think about consolidating your debt onto one with a lower interest rate.
In general, tackle what you can and remember that communicating with creditors is really important. You’re not the first person to experience financial hardship, and you won’t be the last. Communicating with creditors lets them know you’re trying, so contact them as soon as you know you’re going to have trouble making a payment.
If your needs are immediate and pressing, call 211 on your phone or access the 211 web page to connect with local resources for help with food, housing and financial assistance. For information on debt problems — and the most common options for addressing them — visit the Federal Trade Commission.