11 ways to improve your financial situation during the crisis

Pandemic coronavirus has dealt a serious blow to the economy and personal Finance employees across the country. Experts predict that the total number of unemployed Americans can reach a whopping 47 million. Of those who have not lost their jobs, many are cutting wages or working hours, as business owners trying to stay afloat, reminiscent of GOBankingRates.

11 способов улучшить вашу финансовую ситуацию во время кризиса

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Regardless, have you lost your job or encountered other financial difficulties, there are several effective ways to improve the financial situation during the crisis.

Review your budget

Do it to know exactly how much money you have and how much you need to cover basic needs.

“The budget is the key to feeling financially secure right now and determine if you can make ends meet, said Tony Drake, chief financial officer and founder of Drake & Associates. — Shall describe the budget. List all expenses, including fixed, such as mortgage, car payment and cell phone bill. It must also include variable expenses such as utility bills, food and entertainment. Then determine what income you receive. If your expenses outweigh income, you will have to look carefully at where you can reduce, even if temporarily.”

Reduce as many non-essential expenses

“In these unprecedented times, there are many things you can’t control, but you can manage your savings and expenditures, said Lindsay Sacknoff, head of consumer deposits and payment products at TD Bank. Today’s financial decisions will create a cushion that will help you plan what may be ahead.”

To this end, it recommends a reduction of unnecessary costs — any expenses for food, prescriptions, rent and utilities.

“By excluding from its budget for any necessities, you can easily save a few hundred dollars in the coming months, said Sekoff. — The suspension of the membership in the gym, cancel services that you never use, and cleaning your home is cleaning services — it all works”.

Overestimate the costs of certain needs

Although it is best to cut unnecessary costs, you can take into account the costs of some necessities in your budget — although these “needs” may now look different than in the past.

“Taking into account the cost of basic necessities such as transportation or child care, you can reallocate these funds into new “needs”, such as buying games for their children at home, or online streaming services for TV and films, fitness classes or application for meditation, said Shelly-Ann Eweka, Director asset management at TIAA. In addition to protect your wallet, it is important to give priority to mental health of you and your family in this new reality.”

But set a budget for ad hoc expenses

“Though it’s easy to assume that the quarantine will automatically reduce your costs, meals and shopping online can make us quickly build up the credit cards,” says Lauren Anastasio, CFO of SoFi, a company engaged in personal Finance.

She recommends the new budget, which takes into account these situational costs.

Try to reduce fixed costs

“Look at the utility bills and insurance, to make sure that you are getting the best rates, said Howard Dvorkin, Chairman Debt.com. — Save water, electricity or gas, so that it was good for your wallet and the environment.”

Review your savings

Find out how much you have savings in savings accounts, emergency funds, retirement and other accounts.

Drake recommends that you ask yourself whether you can use savings to make ends meet? If so, what are your options and how each will affect your financial future?

Delay as much as possible while you can

“As we enter into a potential period of unemployment or reduced income, we want to have the best possible financial cushion, said Anastasio. — If you have not lowered wages, not be fired or cut your income otherwise, do your best to collect as much money with the income that you still have”.

Create an emergency Fund

“As clearly shows the pandemic COVID-19, the financial stress may hit suddenly, said Greg Klingler, Director of asset management for the Association of civil servants. — Emergency Fund is an important part of your budget, and you may need to make a slightly smaller contribution to your savings (retirement or debt payments), and/or desires (entertainment, clothes, etc.) to establish and Fund it. All Americans should support the Fund at the level necessary expenses for 3-6 months in cash”.

Prioritize the payment of the debt

“It could be difficult to pay the debt in addition to other your accounts, but you need to try to deal with debt subject to a high percentage, such as credit card debt,’ said Drake. — We spend most of the money for debt with a high interest rate, so don’t let them pile up right now.”

Drake recommends that you use the avalanche method to pay their debts: “Start with the payment of your debt via interest rate. Prioritize in the direction of the debt with the highest interest rate, leaving the minimum payments on the rest. Once this debt is paid, go to the next highest interest rate.”

To continue to contribute to retirement savings

Covering payment of the necessities, and the establishment of an emergency Fund should be your priority, but if you are able to continue to contribute to retirement savings, you should do it.

“Many people face difficult circumstances that require a temporary reduction or cessation of pension accruals, said Meca. — However, you must continue to invest in their retirement as much as possible. Perhaps this means the allocation of the funds that you were saving for the coming months, such as children’s sports or extracurricular activities, and to put these costs in savings”.

Keep calm and investments

With all the volatility of the market tempting to earn on your portfolio of stocks before the value will be even lower, but Klingler advises not to do so.

“Although you and your financial Advisor should periodically review and carefully consider the balance of your portfolio, it’s important to remind yourself that you are not playing games: you invest in the long term and in its long-term financial security, he said. Patience is really a virtue, when we are faced with a constant volatility of the stock market. Unfortunately, I saw a large number of clients make emotional, rash decisions during market turbulence, only to see a quick backfire, undermining their long-term financial security and putting them on a very difficult path.”

What to do if you lost your job or your income has decreased

As a result of the coronavirus a pandemic, many Americans temporarily out of work, went on vacation or are faced with reduced wages, so they may have to take additional steps.

Call the company that serves your credit card, if you are late with a payment

“Quickly prioritize: which bills you can pay this month. In some cases it is simply impossible to pay them all. If you find that you are unable to pay by credit card, call the company that serves your credit card, and see if they can give you more time and to reject any percent — suggests Eveko. It might give you a little more time to get help.”

Talk to all your creditors

In addition to your credit company and talk with other lenders to see if they can offer assistance.

“Many lenders are ready to offer you options for payment changes or even delay on some of your largest expenses, including mortgages, auto loans, student loans, etc.,” said Anastasio.

Apply for unemployment benefits

If you lost your job, apply for unemployment benefits as soon as possible.

“The draft law on financial assistance in connection with the coronavirus strengthened unemployment benefits,” said Klingler.

Under the bill, the Federal government will give the unemployed an additional 600 dollars a week in excess of their allowances for four months. But be prepared for the usual waiting period of two weeks before you get your first money.

“Applying for unemployment benefits suggests a waiting period, usually equal to seven days, and the applicant can expect processing your first check/Deposit through an additional seven days,” said Klingler.

Consider obtaining a line of credit Home Equity

If you do not have enough financial cushion to survive the loss of a job, and unemployment benefits are not enough to make ends meet, you will need to find additional sources of income. Klingler said that, your credit line must be the first choice.

“If you have capital in the form of the house and open a HELOC you can access this action,” he said.

Remove funds from your 401 (k)plan

If a HELOC is not your option, you may want to consider borrowing from retirement accounts 401 (k).

“The new law on financial assistance in connection with the coronavirus allow persons under the age of 59.5 years old to distribute up to $ 100,000 from their 401 (K) without paying a 10% penalty,’ said Drake. — Be sure to talk to a financial professional about your options before you withdraw money from retirement accounts.”

Take a personal loan — but read the fine print

You may need to take a personal loan or line of credit at this time, but do not rush to accept the first offer that you get.

“Do your research and read the fine print,’ said Drake. — Fees and interest rates can increase rapidly, so it is important to understand what you are signing. Before agreeing to any form of loan, explore other options.”

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