The COVID-19 pandemic has completely upended daily life for Americans in the past few weeks. Many are adjusting to working from home, and things as simple as walking outside and spending time with friends have been complicated by the need for social distancing.

Yet, while active cases are a major health concern, many Americans are more worried about COVID-19’s impact on their finances. Three in four Americans say they’re afraid that coronavirus will trigger another recession, according to a recent poll. What’s more, 67 million Americans say they’ll have trouble paying their bills because of the virus, according to WalletHub.

The U.S. government is working to ease the financial pain and recently passed a coronavirus aid bill that provides paid leave and increased assistance to food banks – but many Americans are already feeling the pinch. If you’re concerned about your own financial security, here are some actions you can take to help minimize the financial impact of COVID-19.

Take stock of your current situation.

With many people facing scaled-back hours and even job loss, the best way to make the most of your finances is by assessing what you have to work with. Try to figure out what your hours and income are likely to be in the coming weeks and months. Take a look at how much cash and credit card capacity you already have. And if you’re expecting any cash lump sums, like a tax refund or commission, try to set aside some or all of it to save.

Additionally, make sure you have a plan for paying important bills, like credit card and loan payments, to protect your hard-earned credit score during this crisis. If needed, ask your creditors to consider payment plans or inset a consumer statement on your credit report if you’re not able to keep up with your bills.

Create an emergency fund.

Take a look at any savings you might have, along with your current budget and habit, so you can develop a solid game plan for the coming weeks and months. Ideally, you should have six months of living expenses stashed away for an emergency, but that’s not possible for everyone. If you don’t already have a rainy-day fund, start putting aside what you can. Urban Institute found that even a cushion of $250 can be a big help in managing unexpected financial situations and covering rent or utilities if you need to.

Look at what’s essential and what’s not.

When it comes to monthly and weekly spending habits, where can you cut back or save? Right now, it might be a lot easier to save on things like gas, going out to restaurants, and parking – all because we’ve had to adjust to staying home. Knowing the exact ins and outs of your budget could save you even more money as you wait everything out.

For example, review your recent credit card statements to identify spending patterns, and even request copies of your credit reports, so you can plan that much more effectively. Look at all nonessential costs, such as memberships you may not be using or subscriptions you can do without.  And, while it’s great to support local small businesses during the crisis, it may not be feasible for your family to get takeout several times a week. Consider cooking at home together instead. With shelter-in-place orders in effect across the country, you can also opt for low-cost, stay-at-home family time.

See how your employer can help.

Some companies and many 401(k) plans offer employee assistance programs or hardship withdrawals for workers. Many of them are adapting their benefits programs to cover coronavirus-related expenses, like staying home with a sick family member or a child who’s out of school.

The recently approved government coronavirus aid package also offers paid sick leave to those affected by COVID-19 as well as new rules around withdrawing or borrowing 401(k) funds. Check with your HR department about available aid options and how to apply.

Make life insurance part of your plan.

Life insurance is the foundation of a solid financial plan. It provides protection and can reduce financial pressure during uncertain times. It’s also more affordable than most people think: A $250,000 term life policy for a healthy 30-year-old costs just $13 a month. If you’re not already covered, getting a policy can give you peace of mind. Learn about your options here.

If you already have life insurance coverage, think twice before canceling. The potential benefits can far outweigh any costs. Canceling could also mean you would have to reapply based on your current age and health status, which could raise your rate. Struggling with paying those premiums? Some insurers may be able to help pause your payments temporarily.

Protecting your security during uncertainty

During times like these, having an effective backup plan can help reduce stress so you and your family can focus on what’s important: staying healthy and safe. eFinancial is here to help you protect what matters. While many companies have put medical exams on hold during the outbreak, we offer life insurance options that don’t require medical exams or give you six months to complete such an exam, so you can get covered right away from the comfort of home. To find the policy that’s right for you, start your quote online or give one of our agents a call.

 

At eFinancial, our goal is to make life insurance simple, affordable, and understandable for everyday families. This content is intended for educational purposes only. Each post is carefully fact-checked, reviewed and updated regularly to ensure the information is as relevant as possible.