With millions out of work and an economic recession taking hold, almost everyone has been affected financially by the pandemic — even if you are still working. No matter your circumstances, this can be tough territory when it comes to managing your money. Here’s how to handle your finances depending on your situation.
If you’re out of work:
If you haven’t already, make sure that you apply for unemployment benefits. You’re entitled to them, and there is zero shame in taking advantage of these benefits.
Make an essentials budget and see what spending is really necessary. Try to negotiate your bills or defer big payments. See if your landlord or utilities company can lower your rent or service rate temporarily. Reach out to your credit card company and ask for waived late fees or a reduced interest rate to help while you don’t have cash coming in. Then, limit your discretionary spending.
Look for freelance or part-time work if you can. If you can tolerate the risk of working a gig job, that might be a way to bring in a little income. In several states, you can still claim partial unemployment even if you’re bringing in some money.
If your partner loses their job:
Reassess your budget right away. Since you still have some income, you may not need to switch to an essentials budget, but you will need to prioritize your expenses before debt starts creeping up. If you have big monthly payments, like loans, see if you can defer them temporarily.
Next, try to increase your remaining income. Whether that’s asking for a raise at work, looking for a side hustle or taking on freelance projects, the closer you can get to your original income, the better.
And be there for your partner. Honor their space while being supportive and listening to their needs. Different people deal with loss in different ways, and your partner is no exception. Losing a job can be a huge stressor, so be gentle with your partner and yourself.
If you’re dealing with a pay cut:
If your company is paring back on wages, you may be eligible for partial unemployment, depending on your state and your salary. Look into your options for government aid — again, it’s a benefit you should claim if you are eligible.
Now is also a great time to do an audit of your finances. Look through your credit card statements and receipts carefully - what are you spending on right now that you don’t absolutely need? Subscriptions or gym memberships could be an easy place to start.
Start looking for other roles. If your company is hiring in other departments, look into a lateral move or spruce up your LinkedIn to start looking for something new.
If you’re concerned about job security:
If you think there’s a chance your job might be in jeopardy, start building up your emergency fund. The target amount is up to you, but many experts recommend starting with three to six months of expenses set aside in case you are out of work. These expenses are to cover your necessary bills and essential spending, like groceries, not the full income you make in an entire month.
Make sure you are continuing to shine at work. Many people are working from home, and it can be tough to excel when your managers can’t directly see what you’re doing. Check in with them early and often so they know how hard you are working.
Stay in touch and follow up with your networking contacts. If your job is secure, maybe there’s someone in your network you can refer to an open position at your company, or contacts you can reach out to in case your job becomes less stable.
No matter your situation, navigating a pandemic isn’t easy. Be gentle with yourself if you make a mistake, and keep moving forward with your financial goals in mind.