From mass layoffs to shuttering businesses, the economic implications of the coronavirus (COVID-19) pandemic have begun to take a toll. So much, in fact, that financial anxiety has been dubbed the "second pandemic."|
If you've lost work due to COVID-19, you're likely familiar with this type of anxiety. You may also feel stressed about the coming weeks and months, which is completely natural. The future of our country, after all, is largely unknown.
While you can't control how the economy unfolds in the coming months, you can control the extent of your money worries. Consider these actionable, expert-approved tips for easing financial anxiety during these strange times.
1. Negotiate your bills
If you're experiencing financial difficulties, negotiating with your creditors and service providers is one of the best things you can do. "Ask your creditor if they have options for financial relief," suggests Kacy Smith, financial coach and founder of Straight Cents. This might entail a lower interest rate, deferred payments or a lower minimum payment for the time being.
Understandably, it can be daunting to make those calls. So, to make the experience more comfortable, Smith recommends preparing your paperwork beforehand. She also suggests addressing reps by name to establish a rapport and calling in the morning, before they have dealt with a day's worth of angry people. "Be kind and polite," adds Jeff Rose, C.F.P., creator of Good Financial Cents. "[This] will go a long way in helping you come to a mutually beneficial agreement."
2. Pay your bills on time
On the other end, if you are in a position where you can continue paying your bills, keep it up. This will protect your credit score and limit, prevent unnecessary late fees and safeguard your bottom line.
Moreover, making on-time payments maintains your standing as a good borrower or customer. This will come in handy in case your financial situation does change, which may prompt that call to negotiate your bills.
3. Work a temporary gig
Many businesses in the service industry—including grocery stores, food distributors and mail couriers—need extra help right now. If you're healthy and able to work, consider working a temporary job, even if it pays less than your previous position.
In the short-term, working a temp gig can ease the financial strain while covering some essential expenses. But the benefits also extend to the long-term. According to Smith, falling behind on payments can have a lasting effect on your overall financial picture. However, by bringing in some income, you can reduce (or avoid) any potential consequences down the line.
4. Limit non-essential expenses
In the wake of economic uncertainty, reducing non-essential expenses is now more important than ever. This includes expenses like magazine subscriptions, music streaming services and unused phone apps. Cutting back on these costs will allow you to redirect that cash toward essentials, like food and utilities. To pinpoint these expenses, take a look at your last credit card bill and investigate any charges you don't recall to see if they're recurring bills you can eliminate.
While you're at it, be mindful of spending out of stress, anxiety or boredom. With more time to scroll and shop, it's all too easy to acquire more debt from the comfort of home. "This is a good time to see what we can live without—and save money at the same time," Smith shares.
And remember, panic buying paves the way for impulse purchases. Instead of buying things you normally don't need, stick to your essentials and leave some for others.
5. Make your own meals
Similarly, prioritize home cooking and meal prep whenever possible. "Many restaurants are still open for takeout and delivery. [But] if you want to reign in your spending, eating at home will save you a lot of money," notes Rose. "This will take some forethought, but it will be a healthier and more frugal option."
If you can afford the occasional takeout, opt for small businesses and local restaurants. Every dollar will help your go-to spots stay afloat during this difficult time.
Finally, be patient with yourself. We are currently experiencing an unprecedented moment in global history, something for which no one could have properly prepared. And while you may have to temporarily change how you handle your finances, it might be just what you need to navigate this new normal.