How are you managing your bills during COVID-19? Are you letting your bills manage you?
Check out how people like Daily Money Managers are guiding people through their money problems in this pandemic. And hey, why not use these tips to help your family and friends?
We continue Meet the Experts series with Jeremy Zizmor. He is a daily money manager at Assurance Family Partners. Who else to ask how to navigate these crazy financial times than the person that deals with it daily! I’ll admit, this article has been sitting on my desk for few weeks, and just now I am able to edit and post it.
Recently I had a discussion with a client about taxes (which by the way were due July 15th, just a reminder😉); payment, how and why she is anxious about it. What I told her works for EVERYONE:
Get control over your finances so you do not feel anxious and overwhelmed by the thought of it. Knowing where your money are gives you the freedom to not worry about it!
Here are some of the strategies he is suggesting we use when going through this period. Honestly, I think 2020 will be the year that everyone got really good at understanding their finances and personal values.
Gather Your Resources
You need to know how much cash you have available. In addition to your bank account balances, do you have other pots of money you can include?
This could be funds tucked away for a vacation or a special purchase. (You may need to set those plans aside for now.) Do you have gift cards you can use for necessary purchases, or credit card cash rewards you can redeem? Are you receiving any unemployment or other benefits? Is anyone in your household receiving a paycheck? Can you pick up a temporary work-at-home job? Do you have any unclaimed money held by your state?
Total the amount available from all sources. If you have emergency savings, it is worth reviewing your account balance and identifying other sources of funds. There is much uncertainty in the U.S. economy right now, making it important to tap into emergency savings wisely.
People need to rethink their budget. Chances are, there are places in the budget that could use a little moving around right now (like canceling a gym membership and putting that money toward immediate needs or an emergency fund). To do this, make a plan using your baseline income:
Make sure you know where your money is going
Look at all your receipts and credit card statements and note where you’re spending your cash. Write it down! Review your statements from the past 12 months to catch bills paid a few times a year, such as property taxes and insurance. Think about where you can cut back on spending. Consider opportunities on things you can’t use right now. Consolidate subscription services and memberships or cancel what is not essential right now. Ordering meals out, buying unnecessary items. Reduce television service. If you are not driving your car to work, can you negotiate a lower insurance premium? Are there recurring charges on your credit cards you can stop?
Identify your truly necessary expenses
Rent, Utilities, Groceries. Add them all up. Work to make sure those expenses stay covered as best you can.
Like many people, if you have experienced a loss of income.
Try to negotiate down some of your fixed expenses (Medical debt, Credit cards, Student loans, Charge cards with merchants). If you can’t get rid of them, maybe you can lower them.
If you are still working but making less than usual.
Put your retirement contributions on pause. If you need to, reach out to lenders, landlord, utility and other service providers and request deferment on your mortgage or other loans. Call your CC company to negotiate your interest rate. These deferments don’t forgive the debts entirely, but you build the time to save the money to cover them and you won’t get hurt by the credit bureaus because these deferments don’t make you in default or late. BUT you must call to negotiate and arrange these deferments. Simply not paying will hurt your credit rating.
With groceries, make a plan before going shopping and budget for the groceries you need most along with backup options in case items are unavailable. Stick to this list.
The power in any good budget is in the planning.
The way to stick to the plan is to track the money going out and coming in. Track everyday as you are doing it or once a week. Adapt the rules for your own needs. Reward yourself a little when you write down all your expenses and you stay on a budget. If you can, have a little fun with it. It doesn’t have to cost you any money – make a cup of tea that you really like, take a walk around the block when you are done.
Sticking to a plan is going to help make life easier even when it feels like everything is out of control
If you’ve got a list and you can check things off, it feels really good when you get to the bottom. Right now we could use a few things that make us feel really good.
Look for educational webinars
Everyone’s craving face-to-face interaction—even virtually. So, find resources bringing people together to host free webinars on money topics. Look for talks about how to manage your money in a crisis (and maybe just how to manage yourself in a crisis), pre-crisis struggles, like how to budget or how to get out of debt.
Nowadays, there might be even a small outdoor event/gathering where you can meet with other like minded people to discuss your financial journey and ideas.
Spend That Stimulus Check (Wisely), if you haven’t already.
There are certain things to do with this money: make sure you can cover your food, utilities, shelter and transportation (those $100 sneakers/shoes don’t count). That will put you on the path to stability.
While the stimulus check is an answered prayer for many, $1,200 doesn’t go far when adding rent, groceries, etc. It’s a good reminder that people can’t and shouldn’t count on a government bailout.
Revisit what you set out to do: Are you still on track to get out of debt? How’s saving for that house going? Things are tricky and forecasts have changed—but your goals are still possible. Put one foot in front of the other and adjust as necessary.
Think Outside the (Money) Box
Highlight the positives in your situation. Everyone’s experiencing tons of downtime, so it’s a great chance to spend more quality time with the family. It’s also a chance to learn something new—like picking up that hobby you’ve always wanted to try. Take advantage of this unexpected free time.
While there is a lot of uncertainty currently, we can take control of our finances by being prepared and remaining proactive. Doing everything all at once is unrealistic, emotionally overwhelming, and leaves no wiggle room for being successful. (And you have to celebrate milestone successes along the way to remain motivated!)
Start with these specific actions today to make things easier at a time of extreme stress. These recommended actions are the same ones I have been leading clients through during this challenging time.
Let me know how you did! Share any challenges you are encountering along the way.
Now let’s all go through the statements and see what we can cut out! The weather is finally nice and we can be creative with entertainment and activities. Who is with me?