You are not alone. The COVID-19 pandemic has put a financial strain on many, if not most, American households. Worries about making ends meet are understandable, but there are ways to help save money and weather the storm.
It’s easy to be overwhelmed. The U.S. Treasury advises that as a starting point, your first priority is to ensure your family’s basic needs are met for housing, food, utilities, telephone/internet, and transportation.
Once you’ve accounted for those expenses, experts suggest you then focus on paying your bills and reducing debt. Here are some of the ways the U.S. Treasury Department suggests how to do so:
Call your mortgage lender about options for potentially suspending or reducing monthly house payments. If you hold a mortgage by Fannie Mae or Freddie Mac, there is help. Those mortgage buyers have suspended foreclosures and evictions. Ask your company if you hold a Fannie Mae or Freddie Mac loan. The Federal Housing Administration also has stopped evictions and foreclosures insured by the FHA.
If you rent, contact your landlord to ask for options. Many landlords will work with you. Some cities have also prohibited evictions during this time.
2. HEALTH INSURANCE
If you have lost your job during the coronavirus, COBRA allows laid off workers at larger employers to continue their health insurance coverage. COBRA can be expensive, but there are other, more cost-effective options. For most insurers, layoffs can qualify as a life event outside the open enrollment period, so check to see if you are eligible. Some states have also re-opened their insurance exchanges. People who have also lost coverage through their employer can shop the exchanges outside the regular enrollment period. Be sure and check to see if you may qualify for your state’s Medicaid program as well. If your income has been reduced, you may also qualify for subsidies regarding health care insurance.
Most utility providers offer programs to help when customers cannot pay their electric, gas, or water bills. Ask your providers about what they offer to help with your bills, and check with your local community, since several cities have also stopped utility shutoffs. There may also be non-profits in your local area that offer charitable utility assistance.
Car loans, credit cards, or other financial and student loan debt also need to be addressed. Call your lenders for each of these loans to see what kind of arrangements they might be willing to make, such as lowering interest rates, reducing payments, or waiving fees. Due to the outbreak, federal regulators have instructed these companies to cooperate with borrowers. Your bank or credit union may also be able to make economical arrangements to improve your cash flow. Regarding student loans, the U.S. Treasury says all principal and interest payments on all federal student loans have been suspended through September 30, 2020. If you have a child attending college, be sure to also contact that institution to see if you can adjust your income for more financial aid for the coming term.
5. HOUSEHOLD BUDGET
Now is the time to take a look at your household budget to determine your wants vs. needs. If you can exercise outside, consider ending your gym membership throughout the summer and fall months. Review online subscriptions to multiple music, online, and movie streaming services, or other apps you can live without, especially if they overlap.
Social distancing provides an opportunity to cook and find entertainment at home. Encourage your children to help with creative meals. You can even turn it into a contest! Plus, everyone can enjoy old-fashioned entertainment alternatives such as board games, reading, or DIY projects, in place of eating out, paying for movies, or attending sports or concert events.
Once you review all of these items, you may be surprised just how much money you’ll save. By looking into possible ways to reduce payments, weathering the storm can become attainable.
For more information and help regarding federal resources for financial relief and warnings regarding scams, visit the U.S. Treasury’s personal finance and consumer protection website.
This article is for informational purposes only, you should not construe any information provided as legal, tax, investment, or financial advice. No reader should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence.
Form TRN00005; Rev. 4-2020