The year 2020 has brought a lot of financial uncertainty to the world during the corona crisis. Businesses are shutting down left and right and with that leaves a lot of people jobless. If you find that you are one of these people stuck with no job, few job prospects, and a tight income, you are not alone. As an attorney, I have helped many people in similar situations. From the 2008 recession to now I have seen it all. Here are some tips I like to tell my clients in order to help them gain some financial stability.
HOW TO MANAGE YOUR INCOME DURING THE CORONA CRISIS
Let’s say you’ve been laid off because of the corona crisis. Where is your next check coming from?
• First things first. If you have been laid off you need to file for unemployment as soon as possible. The sooner you apply, the quicker the application can be processed, and the faster you’ll see money coming in again.
• If you no longer have a job now is the time to update your resume and begin job hunting. With more people out of work, more people will be applying for jobs. Because of this, you want to stand out with your resume. Now is also a good time to work on improving your skills for your next job.
• If you have not filed your tax return and you are entitled to a refund, file your taxes right away. That way you can use your refund to help you make ends meet during the crisis.
This is where you want to make a budget and keep a budget.
• Be sure to pay on your critical expenses. This means your electric, water, gas, rent, and more. If you find you are not able to pay your utilities, call the various companies and work on a payment plan until you are on your feet.
• If you have a mortgage payment or rent that you aren’t able to meet, contact your bank or landlord immediately. Remember that mortgage banks will not start foreclosures right away and your landlord will not start evictions immediately either. As of right now, courts are not doing evictions for 90 days (until the end of May). Currently, this is a terrible time for landlords to be looking for new tenants. Because of this, they will likely work with you. It would be good to learn the foreclosure laws and eviction laws to help ease your mind.
• Now is the perfect time to make sure your car and health insurance are up to date and current. With everything going on with the corona crisis you want to make sure you are protected from any future harm–seen or unseen.
• If you find you are short of money and can’t pay your credit card debts, pay on the card that has the highest interest first. You can also try applying for a new credit card that has zero-interest for the first year. If that doesn’t work you can always try to negotiate a settlement or a reduced amount on your debt when the crisis is over.
• If you have a mortgage rate that is over five percent (5%) consider refinancing your house. By doing so you will be able to lower your payment and this will help give you time to get back on your feet.
• During a time in crisis people often dip into their retirement funds. You will want to avoid this at all costs. If you dip into your retirement account early there can potentially be high penalties applied to you that can do more harm than good.
• Currently, the Treasury and the IRS have allowed for a deferment on tax payments during the COVID-19 outbreak. This means that you no longer have to file your tax return until July 15, 2020. However, if you are entitled to a refund then you will want to file your taxes as soon as possible.
Remember that the corona crisis has caused tough times on everyone. Don’t get discouraged or over-react in the process of maintaining financial stability. You will be able to get through this. Remember to avoid any scams or people trying to take advantage of you during this crisis.
There are also many resources and tools one can use to get through this time. Believe in yourself and know that you are not alone. I believe with the proper actions taken many will be able to regain financial stability again. Hang in there.
Disclaimer: Each business and/or individual situation is different and unique. This article is intended to provide you with general advice only and not to be construed as legal advice. If you would like a detailed approach to your particular situation, please contact David J. Winterton & Associates for a consultation to discuss your options.