Personal Financial Tips for Families Facing COVID-19 Financial Issues
The pandemic has put an unforgiving amount of pressure on families now more than ever. With millions of workers being laid off or temporarily furloughed and non-essential businesses being forced to close, there’s no question that finances could be a leading concern for many.
And with 30.2 million small businesses nationwide, most have struggled to receive financial aid from the government.
Whether your family has been negatively affected by the coronavirus or you’re preparing yourself for an economic downturn, your McAllen VCFO at Abigail Y. Murray CPA, LLC, are here to provide tips to help you stay afloat and manage your finances.
When you’re overwhelmed by bills and have other debts to deal with, it’s challenging to know which payments to prioritize. You may think it’s best to pay off your debts first, as it’s difficult to function with that on your mind. But, in actuality, what you really should do is address your family’s immediate needs first.
For many, freezes have already been put in place for things such as student loans and mortgage payments. This can give you the peace of mind to focus on feeding your family or handling the day to day necessities.
Asking Lenders for Forbearance
There may be some bills you could get away with delaying payment for, but you’ll still need to contact your utility companies and lenders to let them know what you’re able to cover or that you won’t be paying due to job loss or some other financial strain.
Some municipalities have already made sure that utility companies don’t cut off services to households that don’t pay. However, you should still let them know so that your power doesn’t accidentally get cut off. You might also want to look into what your internet, cable and mobile phone providers can do for you during this time. Credit card companies and banks may also waive certain fees, while medical bills may be accepted via a payment plan or delayed payment if you request forbearance.
If mortgage and rent payments are still expected to be covered, you may be able to negotiate with your bank or lender to defer mortgage payments.
Apply for Financial Aid
While more people are being forced to transition into a work-from-home reality, many others are completely out of work for the time being. In addition to that $1,200 stimulus check you may have received, you might be able to apply for unemployment benefits if your hours were cut, your job was eliminated or you’re self-employed.
While you might have already heard or experienced, getting through the unemployment process is a challenge in itself, yet, 30 million Americans having already filed claims since mid-March. It is worth noting that you could be entitled to an extra $600 per week and may be able to access state benefits as well.
Applying for unemployment immediately is important, even if you aren’t sure whether you qualify because it can take weeks to process and new legislation can affect eligibility. Another thing you may want to find out is whether your family is eligible for food stamps or other assistance from your local department of Social Services.
Don’t Take on High-Risk Loans or New Credit Cards
It may be tempting to seek out a quick fix to your financial woes, but you should avoid taking out credit cards or taking on high-risk loans. If you’re struggling to afford essentials, consider paying only the minimum on current credit card payments, but don’t apply for new credit cards during this time.
Doing so would worsen your financial situation.
If you do need to take out a loan, talk to your bank and see whether you qualify for a personal loan. These loans will have lower interest rates than credit cards and other loan options.
Financial Guidance Available to Those Who Need It
Most families are facing some sort of financial hardship during this time of uncertainty, but with these tips in mind, your family should be able to make it to the other side with your finances still relatively intact.
At Abigail Y. Murray CPA, LLC, we understand that these are difficult times, and we are here to help you make the best of your situation
The time to prepare to weather the financial consequences of this crisis is now. Our virtual CFOs can assist you and it can be done remotely for your safety.