SMART Financial Management During Covid-19
The Covid-19 pandemic has dramatically changed our world and it’s normal to feel uncertain about many aspects of life, including your finances. Whether or not you are employed, everyone has and will be financially impacted. That is why it is important that you take charge of the areas of your life that you can influence, and prepare for the future.
One of the best things you can do at this time is take advantage of NYC’s free, professional, one-on-one financial counseling. We help clients find the right bank account, reduce debt, improve their credit and save effectively for the future. You can sign up for an appointment at http://nyc.gov/talkmoney, choosing phone counseling at Bed Study Restoration, or call 718-636-6994 to make an appointment.
While we don’t know how long this will last, we know there has been massive job loss and there may be more to come, if not for you, for family members and friends. Here are some suggestions for creating a pro-active mindset so you can be prepared for the long haul:
Everyone needs a new budget
If you are able to work from home, you are probably saving on transportation costs, but you might need to buy a computer. If you are an essential worker, your transportation costs may have increased. If you have lost your job, you need to cut back, preserve what you have and speak with a jobs counselor.
Everyone needs to sit down and review their income and expenses, to have a clear and detailed understanding of what you have work with. It is recommended that everyone reduce all non-essential items and focus on your primary needs: shelter, food, utilities and basic hygiene. Look at the timing of your cashflow so you will not be caught short. All additional funds should be put away in savings.
If You Are No Longer Earning Income
Make sure you apply for Unemployment Insurance, you will get an additional $600 a week until July 30th. You should be informed in 72-hours if you have been approved, but the system is overloaded and it may take longer. Stay on it and be persistent, despite frustration. If you don’t qualify for traditional Unemployment Insurance, apply for Pandemic Unemployment Assistance. This is for the self-employed and free-lance workers, artists, musicians, tutors, people that didn’t get unemployment insurance previously. You may also want to meet with a Benefits counselor at Restoration regarding SNAP, and other benefits like a rent freeze. An appointment can be made at the same number: 718-636-6994.
Get ahead of the issues: Contact Your Creditors
While it may cause anxiety, it is important to look at your bills and evaluate what you can and cannot pay. Contact your creditors before your next payment is due. Prepare for the conversation with a clear understanding of your goal, which you should know, based on your budget. Plan to explain your situation and if you know when you can return to normal payments, let them know. If you have a long history with the creditor, or generally make on time payments, this is the time to mention it.
Many companies have announced they will reduce minimum payment amounts, reduce interest and increase spending limits. It doesn’t hurt to ask for all of these supports, but do so one at a time. Be realistic and commit to payment terms you can fulfill. A small payment helps extend good will.
If you are able to negotiate new terms, take notes on the conversation, get the name, number and email of the person you speak with and follow up with an email that confirms the payment plan. If you are unable to make any payment and need to request “forbearance” for certain payments, keep track of what you owe, as they will demand the payment at some point. Once you’re able to resume payments be sure to negotiate the most favorable and realistic payment plan. Financial counselors have expertise in guiding you through this process.
Take Advantage of Low Interest Rates
As the feeling of uncertainty takes hold around the world, interest rates are dropping. If you have a good credit score, then you can likely take advantage of extremely low rates for all kinds of borrowing.
If you have outstanding debt such as a mortgage or student loans, now may be the time to refinance. You could potentially save thousands over the course of your loan. Although refinancing can involve quite a bit of paperwork and some costs, it is something you can do from the comfort of your home and help you prepare for the months ahead.
Build your Savings
One potential silver lining of the crisis is that you could be saving a surprising amount! Eating at home, changing your habits, there may be more available to build your savings fund. If you haven’t spent your stimulus check, this is the time to save it and help bring a sense of control to the uncertainty you are facing.
Also, it’s a great time to join our program Brooklyn Saves through which we are helping more than 1,000 Brooklynites to have at least $400 in savings. Take a look at our program: https://partner.saverlife.org/brooklynsaves/ , you will receive a bonus of $60 if you save $20 a month for six months and there are lots of daily cash prizes. One of our clients won $500!
There is no time like the present to start working with a financial counselor. You can sign up for an appointment at http://nyc.gov/talkmoney choosing phone counseling at Bed Study Restoration, or call 718-636-6994 to make an appointment.