Nothing is more challenging or stressful than an unexpected loss of income. Many people in our community found themselves furloughed as a result of the COVID-19 pandemic. While some are finally returning back to work, the financial impact of this crisis will last much longer. Things won’t be easy, but we’re in this together. The key to surviving such a setback is to create a plan and take proactive steps to protect yourself from future challenges and forge better habits for long term success.
Take a Moment to Assess
Losing a job or having your salary slashed is scary and stressful. You may start to feel panicked, but it’s important that you keep a clear head and make a thorough assessment of the situation. Ask yourself these questions:
- How much income do I still have?
- How much do I have in savings?
- What are all of my fixed and variable expenses?
- Is this a temporary or permanent situation?
Take the time to account for all of your assets and liabilities. You need to know what you have and what you owe in order to create a plan. Highlands Community Bank offers online and mobile banking so you can review your accounts in real time. If you have an emergency fund, don’t be afraid to use it! This is what you’ve been preparing for.
Sort Out Your Priorities
Now that you have a clear picture of your expenses, you can differentiate your “wants” from your “needs”. Your wants will be the first thing to go. Consider pausing any entertainment subscriptions, reduce your budget for self-care extras like getting your hair and nails done, and start finding ways to reduce your utilities.
Revisit and update your personal budget to match your new situation. Make sure your basic needs (food, shelter, etc.) can be met with your new budget and cut any other additional costs.
Take Advantage of Relief Programs
If you’re eligible for unemployment benefits, begin that process immediately. While you’re waiting for approval, contact your creditors and utility companies to see if they are offering crisis forbearance. Many organizations have stepped up to provide flexibility in this great time of need.
If you find that you’re still struggling to pay for your basic needs, there’s a variety of health and human services in the Allegheny Highlands and throughout Southwest Virginia. They’re there to help.
While it may seem like your money is locked into your assets, there are ways to extract cash from things like CDs, life insurance policies, and 401k’s to provide an extra cushion. Play close attention to penalty information and weigh the pros and cons from cashing out early. If you have good credit and feel confident that you’ll regain your income, you can also look into taking out a small personal loan, home equity line of credit, or credit card to provide temporary relief.
Learn from the Experience
Taking all of the available information – your present income, your savings, your bills, your debts, any available aid or assistance, and your priorities – you should create a spending plan and stick to it. But, as the situation evolves, so should you. If you find additional income or receive a hardship plan from a creditor, update your plan accordingly.
With any significant financial disruption it can be very difficult to get back to “normal.” But you can find level ground much sooner if you simply act fast and face the situation proactively. Highlands Community Bank is here to support you.