Money Moves to Survive a Coronavirus Recession
For millions of Americans, the pandemic is not just a health crisis but also a financial one. Here's what to do.
With the coronavirus pandemic shutting down most of the country, many Americans are worried about how they’ll survive financially.
A recent survey from WalletHub found that 67 million Americans anticipate that they will have trouble paying their bills because of the coronavirus pandemic.
Help for financially strapped Americans is on the way. A bill signed Friday by President Donald Trump will provide relief to many households, including an increase in unemployment benefits and a one-time payment of $1,200 for most adults earning $75,000 or less annually, based on past tax returns.
Still, the federal assistance will take at least three weeks to arrive. The worry for many consumers is how to manage financially now. Many are working at home, if they have jobs at all, while trying to take care of kids or disabled family members.
“It’s stressful at the best of times to find ways to save, manage bills, or negotiate with creditors, and it’s even more difficult now,” says Marguerita Cheng, a certified financial planner in Gaithersburg, Md.
Fortunately, you do have options. We’ve come up with several steps you can take now to get control of your money.
Paying Your Bills
If you’ve recently been laid off, or if you’re worried that you may lose your job soon, it’s essential to act now to protect your finances. Follow these guidelines.
Coronavirus Relief: Put People First!
Tell Congress to help families struggling to pay their bills.
Cutting Your Expenses
You can free up more cash for your bills, as well as boost your emergency fund, by trimming your spending.
Start by scrutinizing your budget to identify places where you can cut back right away, as well as make more sizable reductions later, if it becomes necessary, McBride says. These tips can help.
Cancel Nonessential Services
Most households today subscribe to a variety of services—everything from little-used streaming or premium channels to gyms. But some of these services you might not use, and you may even forget that you are paying for them. So review your credit card statements and cancel those services, Cheng says.
Cut Down on Takeout
For those who are working at home, you have a budget advantage—you have fewer bills for commuting, dry cleaning, and restaurant meals. Still, you want to avoid spending all that freed-up money on stay-at-home indulgences, such as ordering takeout, shopping online, or buying video games.
“You want to strike a balance,” Cheng says. “On the one hand, you may be stressed, and you want to keep the kids happy, but you want to be conscious of how much you’re putting in your shopping cart.”
Focus on Low-Cost Family Time
Probably one of the most healthy and economical options right now is to get outside, Marshall says, as long as social distance rules are observed. Those with families might enlist the kids in gardening projects or games in the yard. And even in the era of the coronavirus, taking walks is still recommended. That way, both you and your wallet can stay in good shape.
Editor’s Note: This article, first published March 18, has been updated with the latest developments in Washington to help financially strapped consumers during the coronavirus pandemic.