Coping With COVID's Financial Fallout
A Few Ways To Deal With The Most Abrupt Financial Crisis In History
Welcome to Saving Money with Andrew!
For our family, today marks a month of working from home, and three weeks since we entered a building other than our own or interacted with anyone else in person. We are fortunate to work remotely from a nice apartment with green space nearby. Our major stresses are fairly mundane: balancing two full-time jobs with two young children, scrounging for rare items like flour and sugar, and keeping our older kid from rubbing his hands all over the elevator buttons because he knows it drives us crazy.
But many others are not so lucky. As the pandemic continues, its health and economic impacts are increasing rapidly, with shocking headlines. Among other things, 10 million Americans lost their jobs in the past two weeks and US unemployment had its largest monthly increase in 45 years. Many more companies have turned to unpaid furloughs and reduced hours.
In the most affected industries, such as retail and travel, the impacts are extreme. It’s becoming increasingly unclear which stores (and particularly restaurants) will reopen after the lockdown ends. Delta Airlines expects its second quarter revenue to decline by 90%, with 80% of previously-scheduled flights cancelled.
Some of the effects are more subtle, but still meaningful. Locally, grocery prices have skyrocketed, with produce prices up by as much as 50-100%.[1] We’re saving some money with daycare, restaurants, and most stores closed for now, but other items have become much more expensive.
So, what are some things you can do if you, or someone you know, have been economically affected by COVID?
If you are furloughed or laid off, the most critical steps are to determine whether you are eligible for unemployment benefits and to ensure you have health coverage. Recent legislation has broadened eligibility, increased weekly unemployment payments, and extended the length of benefits. The Washington Post has published an excellent guide for those in this situation.
If you are an affected small business owner, make sure to apply for any available relief funds. Most notably, the SBA Paycheck Protection Loan program is intended to provide low-rate, mostly forgivable business loans to help cover payroll, rent, and utilities during the crisis. I know several small business owners who are applying for aid and who will likely depend on these funds to pay bills while their businesses are mostly shut down. The mechanics of applying are messy (to say the least) with many banks yet to set up their applications, but this should (hopefully) be fixed in the next several days. Most banks have set up or are setting up online applications.[2] Just visit your bank’s website or contact your bank.
If you aren’t directly affected, but feel economically insecure and would like to do something, consider some of these suggestions:
Work on a monthly budget. This article from The Balance offers some good tips for getting started. In two recent issues (part 1 and part 2), I discussed how we do annual expense reviews. Now might be a good time to do one.
Go line-by-line through your recent credit card statement to look for savings opportunities, focusing on recurring and other major monthly expenses.[3]
Review my top 9 tips for savings, and some earlier posts if you are looking for more suggestions
And above all, do everything you can to (safely) relax during this time. I’ve particularly enjoyed Yoga with Adriene and the occasional guided meditation with the free version of Headspace.
I hope this has been helpful. If you liked it, please share it with a friend! Also, please send me your feedback, requests, and success stories.
[1] Most likely from increased trucking and labor costs.
[2] For example, here’s Bank of America’s page, though note that you must be an existing customer to apply through them.
[3] One tip - make sure to scrutinize your gym memberships and make sure you aren’t being charged during the lockdown. Certain gym chains have been accused of being customer unfriendly (to say the least) during the crisis.