Now that many businesses have re-opened and schools are preparing to welcome students back this fall, the fluctuating numbers of COVID-19 cases across the country bring concerns that a second wave of the illness may be imminent. If you are one of the millions of Americans who experienced unemployment or other pandemic-related hardship, you may feel far from recovered enough to do it all over again. So, what can you do to prepare your finances for another round of COVID-19?
Here are a few tips to help you plan so that while the world around you may change, life at home can remain relatively normal.
Start saving now
If you do not already have an emergency savings fund, now is the time to start one. Avoid unnecessary expenses, opting to save as much money as possible. This is a great time to revisit your budget and prioritize saving. With the current concern about a cash crisis, you may want to deposit any cash you have on hand or lying around into a bank account. Rather than depositing this money into your checking account for spending, consider adding it to your savings account. This will allow you to accrue interest on the funds you are not using, giving you more money when you need it. Spend only what you need and save everything you can. If you lose your job or face another unexpected change in income, a well-funded savings account can carry you through so you can avoid late fees, missed payments, or having to take on debt to make ends meet.
Reduce your bills
While you are looking at your budget, look carefully at your expenses. The less you spend, the more you can save. So, consider cutting costs either by reducing the amount or eliminating bills altogether. Sometimes, you can reduce your bills by being mindful of your electricity and water use or by calling your television or phone service provider and asking about reduced rates. If you pay for multiple music or video streaming services, select your favorite and cancel the others to give you more money to put into savings without having to sacrifice your entertainment. Another area to reduce costs is food. Right now, many people are turning to takeout and delivery for meals. Delivery costs, service fees, and tips can really add up. If you want to avoid crowds and eat at home, opt for free grocery pickup at your local supermarket and experiment with new recipes that will provide you with multiple meals for half the cost of dining out once. If you cannot imagine parting with your favorite restaurants, consider paying for the membership or subscription to a food delivery service. While this requires an initial cost, it usually eliminates delivery fees and comes with discounts and specials that will save you money over time – especially if you order out a lot!
Be ready to enter the job market
Because of COVID-19, many businesses were hit hard and had to make difficult decisions to downsize or close their doors completely. Whether you have been with your employer for two weeks or two decades, you should be prepared to job hunt. It is stressful enough to lose your job, but it can be overwhelming if you have to start from scratch in building your resume, drafting cover letters, and searching for jobs. Being proactive now will allow you to get back out there quickly. Now is the time to update your resume, draft a few basic cover letters than can be tweaked for specific jobs as needed, and update your LinkedIn profile. It may also be helpful to browse a few job sites to get an idea of what kind of jobs are out there, if there are any certifications or tests you can take now to make yourself a more competitive candidate for the market, and what kind of salary expectations you should have if you are applying for a different industry. It is also a good idea to collect the contact information for three professional references you can include in job applications. While this may seem like a lot of work to do when you are not even sure if your job is in jeopardy, this preparation means one less thing you need to worry about if it is.
Boost your income
Whether you are furloughed, laid off, or your income is reduced due to a change in business operations, having a back-up plan will save you the stress of panicking about whether or not you will qualify for unemployment in time to meet your financial obligations. Rather than waiting to be in that situation, supplement your income now. Not only will this give you more money to save for an emergency, but it will also give you something to fall back on while you are looking for a new job or waiting to be called back to work. You may not have the time to pick up a traditional second job, but you can find a side hustle that offers the flexibility you need to work a little now and work a lot later if you need to replace your employment income. There are plenty of side hustles available that offer a wide range of pay and hours. You can shop for a grocery delivery service, drive for a rideshare service, pick-up freelance writing or editing projects, or things like housecleaning, babysitting, or baking. By finding a way to make extra money now, you are building your finances and a side business that will carry you through the hard times of unemployment should that happen. This pandemic has hit Americans hard. If you are struggling to provide for your family or if you are unable to meet your financial obligations, take advantage of the services available in your area, like a reputable debt consolidation company, credit counselor, or financial advisor. Learn more about your options or check your local government’s website for links to the services available in your area.
