Tuesday 5 May 2020

How to Save Money If You've Lost Your Job Because of COVID-19

With the COVID-19 crisis rendering many businesses across the country inoperable, millions of Americans are losing their jobs and taking cuts to their work hours. Even without a global pandemic, nearly 50% of small businesses fail within the first five years because of debt and insufficient capital.
According to CNN, over 30 million unemployment claims were filed since the middle of March alone. Up to 87% of businesses say their markets have become more competitive and 14% of companies have downsized their IT departments.
If you've had your hours cut or if you've been laid off due to the outbreak, traditional money-saving advice won't be all that helpful. That's especially true when you have kids. With the coronavirus pandemic, the normal rules of life are out the window and you need realistic ways to slash expenses in line with your new financial situation.
That being said, here's what you need to do if you've recently lost your job due to the COVID-19 outbreak.

Defer loan payments if you can

Make a list of your outstanding debt and the monthly payments you make. Contact each creditor to determine what relief options they have available for people who have been laid off or furloughed due to the crisis. You may be able to defer your payments for up to three months. Federal student loans have already been placed on an automatic deferral through September 30.
However, before you ask for deferment payments, make sure that you're aware of what your creditor's deferment policy is. For instance, Bank of America recently filled 150,000 deferral requests on mortgage loans, but all three mortgage payments are expected to be paid in a lump sum at the end of 90 days.

Stop putting money in savings

It's okay if you don't have the finances to incorporate savings into your monthly budget right now. Put savings goals like college funds and retirement plans on the back burner and focus instead on important bills and other essentials.
Granted, it's still good to have a small emergency fund. According to The Balance, an emergency fund should be somewhere between three to six months of expenses. But aside from this fund, hit the pause button on other savings.

Apply for Medicaid

While you're in the process of applying for unemployment, it's also in your best interest to apply for Medicaid if you received your healthcare benefits through your employer. Medicaid provides health care coverage to those who can't afford it, no matter what age you are or how much money you were making prior to being laid off. Medicaid determines your eligibility based on your current monthly income.

Know where you stand with pantry necessities

With so many meals being eaten at home right now, it's not easy to stay within budget when it comes to your grocery bill. But by taking stock of what you have in your pantry, fridge, and freezer, you can get a better idea of what your necessities are and what you really need from the store. You can plan your meals around the food you already have in your pantry to spend less at the store.

Cut cable packages and opt for streaming services instead

With schools turning to online learning during the COVID-19 outbreak, chances are you can't cancel your Internet to save money on monthly expenses. However, you can cut cable packages if you have your cable and Internet bundled.
Instead of using cable services, consider using streaming services instead. With streaming services, you'll be able to cut down on cable costs while still allowing your kids to watch their shows online when they're not attending their school's daily Zoom meetings.
At this moment, everything might feel overwhelming. But it's important not to worry about the long term. Instead, focus on what you can do for yourself and your family in this moment to get through the next few months. Planning for now rather than later allows you the flexibility of being able to take on new opportunities as they come available.

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