Your Financial Survival Guide for COVID-19: Cutting Expenses, Increasing Income

We’ve been providing you with the tips you need to take control of your finances during the COVID-19 pandemic, and we’re back with more important tips! Last time, we focused on keeping things thrifty in your kitchen. This time we have more of a generalized approach based on two big themes: cutting expenses, and increasing income. Let’s get to it!

1. Talk to your cell phone, insurance, and other service providers

Many companies are actually willing to work with you on adjusting payment plans. It may be hard to believe, but the truth is that they want to keep your business as much as you’d like to keep their services right now. Phone and internet providers, insurance agencies, and other subscription services are all ready to make a deal right now—and if your current provider isn’t willing to negotiate, their competition probably is.

We suggest you start with your car insurance provider, as they’re well aware of the overall reduction in driving right now. If you use the same agency for your home insurance, have them see what they can do for you there as well. And if you use different providers for home and auto, you might as well get a quote from each agent about what a bundle would cost. This is a particularly good time to find a deal.

From there, make a list of all other subscription services you’re paying for, and start making calls. You may be surprised how many are willing to work with you, whether it’s reduced costs, deferred payments, or other financial relief.

2. Cancel subscriptions you don’t need

While you go through your subscription list and see what deals you can make, you should also ask yourself whether or not it’s a service you can do without. We know it’s tempting right now to add entertainment services, but from a financial perspective we advise doing the exact opposite. If you’re paying for HBO Max but haven’t watched since Game of Thrones ended, why are you still paying for it? If you have a meal subscription box and you find yourself tossing out more leftovers than you’re eating, it’s time to cancel. And there’s probably never been a better time to put your gym membership on hold.

And don’t forget, you can always pick back up with your subscription services once some certainty returns to our economy.

The one caveat we’ll make here—if your income hasn’t been impacted and doesn’t seem likely to be, it’s okay to continue paying a subscription to an independent or local business. That goes for small gyms, newspapers or magazines, Patreon subscriptions to artists—if you truly believe your patronage is helping someone keep their small business alive, then keep paying for it. Just be sure you use it as well! 

3. Finding additional income

Cutting expenses is only half the battle. The other half is adding to your income. And there are ways to do that, even though many businesses are closing their doors at the moment.

If you’ve lost your job due to COVID-19, be sure to look into the government’s expanded unemployment benefits. Freelance workers and part-time employees can now qualify for unemployment, and weekly payments have been increased by $600 for the next few months.

Bottom line—if you’ve lost work due to the pandemic, it’s worth your time to see what benefits you qualify for. Similarly, if you’re a business owner who has had to shutter your shop, there may be aid available through the CARES Act. 

Whether or not you’ve already applied for benefit relief, we also highly recommend scheduling an appointment with a qualified financial advisor to help you find out what other options you have available.

4. What to do about debt

Even lenders are doing something to help people cope with the realities of COVID-19. There’s a pause on payments for government-provided student loans, for example. There are also new guidelines in place that can help provide relief for mortgage, credit card, private student loans, and even utility payments. If you’re feeling pressure from one of these payments, it’s well worth reaching out and seeing what relief is available.

With all of these, we recommend being direct and honest about your situation. It’s possible that some lenders are only able to give you leniency if you specifically mention COVID-19 as the source of your hardships.

Until next time… 

We truly hope these tips help you find some financial stability in these uncertain times. As always, we’d be happy to meet with you and come up with a personalized financial plan that will help you weather this storm and prosper in the future!