How to Handle Financial Stress in this Pandemic Recession
The coronavirus pandemic lockdown has not been good to the U.S. economy. Millions of American workers have lost work hours, are finding themselves furloughed, or totally unemployed.
Even if you don’t find yourself in dire straits, the financial implications of the pandemic and government response are a source of stress. Financial stress is difficult enough to deal with on a good day — the fear and uncertainty coursing through the country right now make handling these situations even harder.
As states re-open (for now), the substantial loss of hours, jobs, and general financial security is still a reality for many. If you find yourself in a situation like this, having a plan can help you retake control and move forward despite uncertainties.
If you’ve recently found yourself with fewer scheduled hours, a pay cut, or a layoff or furlough, it’s natural to feel panic, anxiety, frustration, and even anger. I get that it’s easy for me to write “don’t panic!” when I’m not in your shoes, but know that it’s natural to experience a range of emotions — give your emotions permission to be affected by this turn of events.
But then be sure to approach decision-making with a level head. Making decisions based on emotions can make you feel rushed and cause you to make choices about your financial situation that may not be in your best interests in the long term. Talk to someone about what you’re feeling and experiencing — when you’ve processed your feelings, then you can begin to take action. That way, you’ll be ready to move forward with at least some degree of calmness and mental clarity.
Revisit your budget
Your budget before your income took a hit won’t look the same as it will after. Revisit your budget and, given the new loss of income, know how much money is coming in and how much is going out for the next few weeks. Tighten up expenses where you can — for example, now might not be the best time to be paying for three or more different streaming services.
Because gyms may not be open for reliable hours, think about suspending your membership or put it on hold for the time being. In addition, many people have been able to defer or only pay interest on their student loans, so inquire as to how to put your loans on temporary deferment if they aren’t already.
When to use savings
If you have any sort of savings, it may be time to dip into those funds until you’ve replaced your income. Dave Ramsey recommends using emergency savings funds for absolutely crucial expenses, like your mortgage or rent, groceries, and utilities. Savings funds can provide peace of mind and a solid backup source of stability if you find yourself suddenly without an income or with substantially less income every month. Don’t feel guilty taking from what you’ve saved if it will help you pay for the essentials during a difficult time.
Know where to ask for help
Know where to ask for help, and don’t be afraid to ask for it — whether that is emotional, financial, or spiritual help. If you need guidance on where to look for work, there are resources available. Take the initiative and be assertive as you move forward. Be open with family and friends about your struggle, and consult trusted people in your circle of friends and acquaintances for guidance, suggestions, and networking that may help you find another job in the meantime.
Start searching for a new job
The thought of trying to find a new job — or another job — during such a time as this is daunting just thinking about it! But it’s not impossible. Consider positions that may be in high demand in your area, or jobs that are needed regardless of the pandemic and its effects on business. This may not be a long-term option, especially if you aren’t able to return to your previous job after a layoff or furlough. But it will help you regain some semblance of financial security in the interim. If you aren’t able to return to your job or find you need something more stable, then you can begin considering your next steps in terms of long-term plans.
As the saying goes: This too shall pass. The reality is that the economy has taken a severe hit, but you can employ your existing skills, connections, and interests to find temporary work to help support yourself and your family and boost your income. Losing your job, a reduction in hours, or a furlough are truly stressful and upsetting, but these things don’t define you. Follow a plan to provide for yourself and weather the storm, and stay hopeful that better days are ahead.