Beginning in February 2020, America, Canada, and Europe locked down cities, closed businesses, and halted travel amidst the onset of COVID-19. Nearly a year later, we’re still experiencing the pandemic’s global impact in our communities.
A record number of people have applied for unemployment in America since March, and millions are still left jobless, behind on their bills, or struggling to make ends meet. If your hours were reduced, your spouse lost their job, or your family has been financially hit during the COVID-19 pandemic in another way, here are a few things you can do to help handle and overcome your financial stress.
Tip #1: Make a To-Do List
Sometimes the most effective techniques are the simplest. When it comes to overcoming your financial stress, start by putting your to-do list in writing. Creating a clear list of what’s ahead can help it feel more tangible and doable.
If you can, start with the easiest tasks, and slowly work through your list, checking things off one by one. With a to-do list in front of you, there’s no need to bear the burden of remembering everything in your head. Starting with a list of tasks can help you more effectively build a plan of action.
When listing bills, consider when they’re due and which providers are offering deferred payment plans right now. For example, your government-funded student loan payments may be postponed, allowing you to redirect money to higher priority expenses, such as your mortgage and grocery bill.
Tip #2: Try Talking to Someone
While working with a financial advisor is recommended, it can still help to open up to a family member or friend in the meantime. Keeping everything bottled up and to yourself is only going to escalate your anxiety.
If you’re able to, talk it out with someone you trust and be honest. Discussing your problems can ease the burden significantly. Your friend or family member may even have some advice to offer. Further, your friend or loved one could be going through the same thing and are also hesitant about reaching out.
Tip #3: Review Your Spending Habits
Ignoring the situation may be tempting, but postponing your financial obligations off will only make them worse. While some financial issues are more complicated than others, taking stock of your current situation can help build a better understanding of where you are today and what needs to happen. This often starts with adjusting your spending and saving habits.
When it comes to addressing your current spending habits, there are a few things you can do right away:
List out every income source you currently have
Determine your debts (student loans, car payments, credit card debt, etc.)
Keep track of all your spending manually or using a phone app
Identify potential spending patterns or triggers (when you’re stressed, right after payday, etc.)
Determine what changes you can make to your spending to save more
Avoid impulse spending
Mint by Intuit is a great app for tracking all of your spending and you can set budgets for specific categories with alerts when you go over. A pen and notebook work just as well. In fact, some people find the act of physically documenting their spending to be helpful in holding themselves accountable.
Tip #4: Make a Plan and Create a Monthly Budget
Creating and tracking a monthly budget is a great way to get in the habit of healthier spending - and healthier spending habits mean less financial stress.
To get started on creating your monthly budget, start by:
Reviewing your list of recurring expenses such as gas, groceries, utilities, etc.
Prioritizing contributing to your emergency fund each month
Setting up automatic payments to avoid late fees or interest
Making cuts where possible (entertainment, clothes, etc.)
Tip #5: Establish a Retirement Savings Plan
If you are approaching the end of your career, retirement is likely looming over your head. If you haven’t been planning before, you may feel unprepared for retirement. Explore options to start contributing to a 457 and review what you should expect from your pension.
Getting your finances in order is no easy feat. Identifying your main stressors and establishing a plan to address them can make a big difference in how you and your family feel about your finances. If you’re feeling lost, confused, or overwhelmed, don’t forget to reach out to a trusted financial professional who can help make sense of your current financial situation.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.