Have you been caught short with a sudden loss of income? Or even a reduction of income, at least temporarily? Times like this can turn your world upside down. Your priorities become putting food on the table and keeping a roof over your head. It’s hard to think beyond that and you may never have experienced anything like this before.
It’s hard to believe but not so long ago, historically, this was how most people lived throughout most of their lives on a daily basis. In the 1800’s this was how many people struggled through life. They lived a very frugal existence without even thinking about it. It’s just what they had to do to survive, but then came industrialization and things began to change. People could feel more secure in their daily lives.
The Great Depression brought it all back. Food insecurity and the daily scramble just to survive. Frugal living was once again the norm. There have been a few more lean times, WW II, and a few lesser stock market downfalls that have shaken people’s financial worlds… but with no real lasting effect (on people's behavior), and now this...
Most people who came through the Great Depression tended to continue to feel that insecurity and lived the rest of their lives in a frugal manner. Their children were raised in that manner, and learned frugality to some extent. But now we have gotten too far away for it to have any real impact on the way we live now, and we all live a much richer lifestyle than those people of yore.
So, this coronavirus situation and the financial repercussions has really come as quite a shock,
and is leaving many people at a loss as to how to proceed from here.
It all depends on your own personal situation. If you still have a paycheck coming in, then the worst of it is psychological, the fear, and stress of dealing with our new upside down world. But if you can stay calm and just hunker down and get through this it will all be ok in the end. If you have investments you have obviously seen them drop, but don’t panic. Sit tight and they will rise again. That is just how the stock market works
If you have experienced loss of income and you don’t have an emergency fund, then just concentrate on your most pressing needs at the moment to get through this. You need a roof over your head (and the recent rent/mortgage freeze will take care of that for the time being) and you need food. If you really can’t afford even that then there are charities and agencies to help you with free food right now. And you can apply for food stamps as well (unemployment too). Beyond that don’t worry about your monthly bills. Contact your loan and credit card companies. They all know the situation and will hopefully defer them for now. The same for any medical bills you are paying. Luckily heat season is over, so that's one less thing to worry about. If you can’t pay your electric bill contact the company. Insurance companies must give you a grace period right now as per the CARE act. That takes care of your monthly bills for the time being.
When your stimulus check comes in, prioritize it for the best possible use. If you need it to live on, then put it in your checking account and use it for your most dire immediate needs. If you are not going to need the money for your current emergency situation, then it is a good idea to use it to pay down your debt and/or put it aside for an emergency fund if you don’t have one. Put this in a separate bank account that you don’t ordinarily access, such as setting up an account in an online bank.
And finally, now that you are stuck at home, if you never want to feel the bottom drop out from you again (financially), it is a good time to re-examine your spending habits. Take a good look at what you have been spending money on. Write down some savings goals. (Hint: one of them should be to save up an emergency fund.) Is your spending keeping you from your future goals? Are you robbing yourself of financial security and a decent future by giving in to reckless, unnecessary spending today? Do you ever want to find yourself in a scary financial situation like this again?
Now is the time, while you have the time, to think about what your priorities are and make a budget to reflect them. Now you have time together at home to discuss your goals and dreams for the future with your loved ones. This could be a turning point in your life. Make the most of a bad situation and turn it around to work for you. You can do it!
Wishing you all safety and good health! And a bright Future!