31 Financial Tips
For Managing Decreased Household Income Due to COVID-19
If yours is among the many American households dealing with lost income due to the COVID-19 pandemic, the BMI Federal Credit Union Financial Education Program is here to help! We have compiled a list of tips and steps to take to relieve some of the stress and financial strain caused by this pandemic.
Look for Income
1. Apply for unemployment benefits. If you have been laid off or lost work, apply for unemployment benefits as soon as you can. Even if you are actively looking for work and close to obtaining employment, it is a good idea to submit your application. Unemployment benefits are managed by state governments. Visit unemployment.ohio.gov to apply for unemployment benefits in Ohio.
2. Consider a temporary job. Not all companies are laying off workers. If you are able, you can consider essential businesses that are hiring. Here are a list of companies that have increased hiring during the COVID-19 crisis.
3. Decrease payroll deductions. If you or members of your household are still employed, you may discuss temporarily decreasing optional payroll deductions with your/their employer. You will want to carefully consider this option, and only use it if needed to avoid acquiring new debt.
4. This is a family effort! If any member of your household has employment or overtime opportunities, do what you can to support those efforts.
Cut Monthly Costs and Plug "Money Leaks”
5. Cut expenses now. Go through your bills and monthly checking and credit card transactions and cut what you can. Fitness centers are closed in Ohio, so make sure your gym membership is “frozen” if you auto-pay. Consider cutting your television and streaming services. Cancel monthly box subscriptions, Amazon Subscribe and Save, etc. Use this as an opportunity to use up what is on hand (to be resourceful), and as result you may discover what really matters and learn what you do not even miss. For example, you may decide that cable is a luxury, while internet service is essential for your job search or remote banking. There are budgeting tools available that can help. If you are a BMI FCU member, you can use My Finance Tool, a digital budgeting tool in Online Banking to easily identify and scrutinize your spending.
6. If you have a mortgage, you may have seen news on a temporary ban on foreclosures and evictions for all federally insured mortgage loans. You will need to get in touch with your lender and servicer to confirm if a hardship program is available for those whose income is affected by COVID-19. Make sure to understand the details of any plan you consider. For Instance, will skipped payments just be added on to the back end? What about interest, late fees, etc.? How will the lender be reporting your loan to the credit bureaus?
7. If you are a renter, communicate with your landlord. Ask if they will consider a delayed payment or waiving late fees.
8. Call your utility companies and ask what options are available. Try to limit your usage of light, power, and water, especially if you are spending more time at home following state guidelines. Also consider that some companies are offering temporary services for free, like added data for mobile devices.
9. If you have federal student loans, check your account with your servicer to see if your loans are under the temporary interest rate reduction and COVID-19 related forbearance program. For most borrowers this will trigger an automatic hold on your payments until September.
10. If you have private student loans, call your lender and explain your household income has been affected by COVID-19. Some private lenders may have a program you can take advantage of. Make sure to understand what you are agreeing to and get any changes in writing. Ask about interest, late fees, and how they will report to the credit bureaus.
11. If you think you will have difficulty making scheduled payments on a loan (whether it be a personal, vehicle, credit card, or any other type of loan) make sure to communicate with your lenders. Some financial institutions offer deferment programs for qualifying borrowers.
12. If you have health insurance, now is a good time to get familiar with what medical providers and facilities in your area are considered “in-network”. Make sure you carry your medical card in your wallet.
What to Do
13. Ask for help when you need it. You can pay it back or pay it forward later.
14. Be clear on financial priorities. For most this means making rent/mortgage, utilities, transportation, food, and related bills first.
15. Use your emergency fund. This is the type of situation you have it for, just be mindful how you use it.
16. Start meal planning and making grocery lists ahead of time. This will help you save money, use what food is on hand, waste less, and minimize your time in the grocery store. You can also order online for curbside pick-up and reduce the temptation and exposure of going inside the store.
17. Protect your credit score. Know that current lending arrangements (loans, credit cards) have the most impact. Making the minimum payment on your credit cards may have to do for now, but will keep the accounts in good standing on your credit report.
18. Spend as little as possible for the time being. Focus on needs; save wants for later.
19. Save what you can. If you have extra funds available from delaying your monthly loans or from the CARES Act Stimulus Payment, make sure to save what you can. For now, use extra money to build up your emergency fund, as well as save what you can for when you have to begin making your payments again.
20. Use credit cards carefully. Credit cards offer an easy but expensive way to borrow money. Consider every purchase thoughtfully, and use your debit card or cash if it helps you avoid overspending. If you are using credit cards, consider checking the balance at least once a week. You can also pay them weekly so you do not end up with an unexpected bill at the end of the month.
21. Look out for scams! Unfortunately, scammers do not take a day off. In fact, in times of desperation, scammers are especially predatory. Look out for any texts, calls, or emails that ask you to share personal login information or account numbers, or urge you to wire money. Contact the company in question if you are unsure if their behavior is legitimate. For more information, read our blog on email scams.
22. Remember that everyone is experiencing the same thing right now. Extending a helping hand (from a safe distance) a listening ear, or a bit of kindness can go a long way.
What Not to Do
23. Do not take “pay day” loans or high interest online loans from unfamiliar lenders. This can be opening the door to a debt spiral.
24. Do not rely on Google, Siri, or Reddit for financial questions. While internet sources can be helpful, make sure you are getting your information from official channels. For example, if you are not sure about the federal income tax filing and payment extension, see IRS.gov. If you are trying to figure out if your federal student loans fall under the no interest and COVID-19 forbearance programs, go to the US Department of Education website studentaid.gov.
25. Do not tap into your retirement accounts. Only consider using these funds as a last resort and for an emergency situation. You will need them later, and they need time to recover.
26. Do not ignore mail or other communications from your lenders and financial institutions. You need to be vigilant with communications from anyone to whom you owe money and any place you deposit funds. Hardship programs are being introduced daily, and you do not want to miss any opportunities that could help your situation.
27. Do not get discouraged! While taking these steps can take a bit of time and may test your patience, understand many are seeking solutions at this time. Your persistence and attention to your financial matters will pay off for you in the long run.
Look for Community Resources
28. Check to see if there is a food pantry in your area. Check out FoodPantry.org, Mid-Ohio Food Bank, Cap4Kids, or Hands On Central Ohio.
29. With a reduction in income, you may qualify for the Supplemental Nutrition Assistance Program (provides funds for groceries), subsidized heath insurance, and child care assistance. Ohio residents can find our more and apply at benefits.ohio.gov.
30. Need assistance with rent, utilities or other needs? Call 211 or visit handsoncentralohio.org for referrals to area agencies that offer support.
31. Look up your local Community Action Agency (oacaa.org/agency-directory/) for additional resources. Also check out the United Way at liveunitedcentralohio.org for information about community services they support.
If you would like support that is tailored to your specific situation, or just someone to talk things over with, you can schedule a free financial coaching session by phone with a BMI Federal Credit Union Certified Financial Coach. Visit our Financial Coach page or call 614.707.4000.