Planning for future expenses is always important, but it becomes crucial during an economic downturn with widespread unemployment. Like right now. There’s no doubt the COVID-19 pandemic has done a number on everyone’s numbers. The good news? The CARES Act was signed into law on March 27 and will provide stimulus payments to those who need it most. The bad news? They’ll have to wait. Possibly weeks, or even months.
What to do in the meantime
Take a look at your monthly expenses. Things like mortgage, car, electricity and groceries all come right off the top. But you may be surprised at all the places where money could be saved. Sometimes just a glance at last month’s bank or credit card statement will give you some ideas. Maybe a subscription you forgot to cancel? A shopping spree that resulted in things you don’t use and could be sent back or even sold online? Eating out a bunch? We’re all spending more time indoors these days. Making meals at home could be a delicious way to save some dough.
Have an emergency fund and need money for day-to-day expenses? This is exactly the time to use those savings—and feel good about it. After all, this is exactly why you worked hard to create those savings.
Currently out of work?
The frustration of losing a job is doubled by the fact that bills never seem to take a break. The CARES Act includes added unemployment benefits, but that takes time as well. Fortunately, many businesses–including TIAA Bank–understand this and are dedicated to supporting those suffering financial hardship as result of the COVID-19 pandemic. It never hurts to ask and often reaching out to your bank, creditor or service provider can spare you some financial headaches
You can use your stimulus payment to grow your savings. Ideally, experts recommend that you have access to 3-6 months of your salary at any given time. If do you have some extra cash, an emergency fund could be an excellent place to put it. Preferably something that offers a high yield, is FDIC insured—and easy to get your hands on when you need it. A money market account, for example, could accomplish all these goals.
Sounds like a plan
In this interim before stimulus payments are sent, please stay safe. This applies to both your health and your finances. Because of COVID-19 we’re all more focused on our money. If you haven’t already, create your budget, get a budgeting partner to keep you motivated, download a budgeting app, and use it. Together, we’ll get through this. We’ll learn and be better prepared for whatever comes next.
- Try a budgeting app like Mint, EveryDollar or YNAB
- Cancel unnecessary subscriptions and memberships
- If you need help, ask your bank, creditors or service providers