In the United States, the Coronavirus (COVID-19) has already caused significant disruptions. Businesses are cutting back on services or closing their doors, and Americans are staying indoors to avoid spreading a global pandemic.
There is a risk that the turmoil will put a strain on the finances of millions of people. Thousands of Americans may lose their jobs and face financial hardship. Starting now, you can plan how to stretch your money during the Coronavirus outbreak.
Here are some ideas for stretching your budget during the COVID-19 pandemic.
Manage Your Expenses
Plan on decreasing your spending and managing your expenses strategically so that your money lasts longer.
- Reduce Spending
Identify ways to save by reviewing your monthly budget and spending habits. Restaurants, concerts, and other gatherings might be easier to avoid due to recent closures. Other optional expenses, such as online shopping for non-essentials, expensive hobbies, and other purchases, can be eliminated. Also, look for ways to save money on groceries and essentials.
Social distancing may help you save money. You can cancel or pause your gym membership, cook more at home, make cleaning supplies and fix things around the house yourself.
Engage your mind and body with virtual tours of zoos and museums, for example, without spending a dime.
- Evaluate Your Bills
Identify which bills are most important among your bills. Rent, utilities, and other essential services should be your top priority. Other bills can be lowered. Follow these other tips to make your bills more affordable:
- Paying only the minimum amount due on your credit card can lead to debt and interest accrual. But if you have to choose between paying down your credit card and affording your rent, choose the latter. Contact your credit card provider if you cannot make your payment – it may be able to come up with an alternative solution.
- Utility companies may be able to temporarily suspend payments or offer other forms of assistance. Consider contacting your utility companies to see if you can pause payments, reduce payment obligations, or receive assistance.
- Federal student loan interest has been suspended indefinitely by the Department of Education. The news isn’t as exciting as it initially sounds, as you’ll still have to pay your monthly bills. However, you do have two other options:
- If you request a deferment or forbearance, you are temporarily able to stop paying. There are many types of deferment and forbearance, each with their own requirements. Loans in deferment and forbearance will not accrue interest for the time being.
- If you qualify for income-based repayment, your monthly payments are set at a percentage of your monthly income, which lowers your payments. As of now, income-based repayment plans do not accrue interest.
Use Available Resources
Utilize any additional financial resources that are available to you in addition to reducing expenses. Taking advantage of your own financial resources or looking for financial assistance can help you get through tough times.
- Unemployment Benefits
If the COVID-19 outbreak has affected your employment status, you should apply for unemployment benefits immediately. As a result of the Coronavirus, some states have changed their unemployment benefits procedures, including removing waiting periods or requiring you to actively seek work while you receive benefits.
- Food Assistance Programs
Supplemental Nutrition Assistance Programs offer financial assistance to individuals and families who are struggling to pay for food. You can check your eligibility here.
You should also check your local food banks and food pantries if you have trouble affording food. Some of these locations provide free food to those in need, while others are open to everyone.
School districts that are temporarily closed are providing free breakfasts and lunches to enrolled students. If your child’s school has closed, check to see if they are eligible for free school meals.
Meals on Wheels is an organization that provides meals to senior citizens in nearly every community throughout the United States who are in need of food assistance.
- Bartender Assistance
Is it your job to tend bars, or are you the spouse or child of someone who does? Bars across the country are closing, and the Bartender Emergency Assistance Program may be able to assist bartenders financially. To qualify, you do not have to be a member of the United States Bartenders Guild.
- Personal Emergency Savings Funds
Aside from your emergency savings fund, do you have any cash on hand? A global pandemic would certainly qualify as an emergency and justify withdrawals.
However, no one knows how long the effects of COVID-19 will last, and no one knows how long your personal situation may be affected. It’s wise to minimize your withdrawals and give your fund as much time as possible. Therefore, you should first try to reduce your expenses and find assistance, and then determine if you need to withdraw from your savings.
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