6 Tips For Dealing With Financial Insecurity

  • March 18, 2020
  • By Joshua D. Scroggin

As the spread coronavirus/COVID-19 is causing all of us to rethink our daily patterns, some folks are not only adjusting to social distancing. Many are also grappling with a major consequence of staying home — the loss of income due to a business slowdown or closure.

So what are some of the best ways to deal with pending financial insecurity?

Remain Calm. It’s surely difficult to do if you’re staring down certain income insecurity, but the first step is to quiet your mind as you look over your economic situation. You’ve got to do some serious prioritizing. The next step is to create a budget (or to make updates if you already have one). Use the tools on our debt management page, including the downloadable budget worksheet. This will help you determine how much you need to pay for your current living expenses and where you might be able to cut back.

Reduce unnecessary expenses. As you look at your finances, see where you can cut back costs. For example, do you have recurring fees or subscriptions that you aren’t getting the maximum value from? Are you paying a monthly fee for your checking account? Consider switching to a free checking account like Freedom Plus Checking. Do you need to have a landline as well as a cell phone? You may only need one. Consider your subscriptions. Take an open and honest look at those you can cancel and live without.

Review your liquid savings. Review your checking, savings and money market accounts, as well as deposit certificates and short-term government investments. These are called “liquid savings” and will be of most help to you during a period of financial instability. You want to use these resources first. With most of these accounts, you can use your money without incurring early withdrawal or tax penalties. You might have to give up some of the interest you've earned on certificates if you close them early, but it still might make sense to take out the money.

Manage your bills. Try to remain on time with your payments so you don’t have to pay late fees — which can cost you more money you may not have. If you don’t think you’ll be able to pay on time or at all, don’t be afraid. You should definitely contact your creditors and lenders before the payment deadline. See what new terms you can negotiate to help you continue to be current. You might even get an extension, and some utility companies have already announced special conditions because of the COVID-19 pandemic.

Pay off your debt. If you can do so, work to pay off debt, particularly those accounts with high interest like credit cards. If you’re in an area where restrictions are being introduced on eating out, shopping or going to the movies, you may want to put that savings on gas and recreation toward lowering your outstanding debt.

Seek financial help. If you’re feeling overwhelmed, talking to a financial advisor can ease some of your worries. Many financial institutions, including CoastHills, have professionals who can help you develop a financial plan to get you through any unstable periods. To contact CoastHills Wealth Management, please visit their website or call (805) 733-7899.

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