Keep your credit and finances healthy during a global pandemic.
The coronavirus is here, and experts are telling us that it’s likely to stay awhile. Aside from the hundreds of thousands that will likely be impacted physically, there are millions of American consumers that are already feeling the financial impact. Worse still, millions more will be impacted in the coming weeks and months. Perhaps the most frightening part is, we don’t know for how long. At least not yet.
In light of this unprecedented global event, I wanted to share a few things with those who have been, or will be, affected financially. Please feel free share this page and it’s resources with your friends, family, and co-workers, that they might potentially ease the financial burden, if not the physical one.
The single most important thing to remember is that you must be proactive. If you’re a procrastinator, there’s never been a better time to work on beating that bad habit. Tomorrow is the first of April, and you simply cannot wait to take action.
Create A Budget
If you already manage your finances with the dilligent use of a household budget, great! You should still probably revisit it, and see if there’s any adjustments that need to be made. You might need to adjust for the changes, depending on your home and work situations. For example, if you are no longer driving to work, you might be able to allocate some of the money you would normally spend on tolls and fuel consumption to reducing your outstanding revolving (credit card) debt. If you normally eat out for lunch while you’re working at the office, that’s more money that you can now allocate somewhere else.
If you’re not a fastidious budgeter, there’s never been a better time to start. Take a careful look at your cash on hand, your savings, your investments, and especially what you’re likely to have in the way of income over the next few months. If you’ve suffered a total or partial loss of income already, it’s very important that you know exactly how much you have to last you over the next few months. I often suggest a review of your last two or three months worth of bank statements to get a handle on exactly what you’ve been spending, and see where you can trim the fat. Cut out whatever you can, and try to plan your bills out for the next couple of months at least. That way, nothing sneaks up on you, leaving you strapped for cash when you really need it.
Communication Is Key
One of the single biggest mistakes I’ve seen people make over the last two decades is not communicating with their lenders, creditors, and providers. It may be a little time consuming to call them all, but trust me, it will save you a ton of future headaches. There have been a number of federal relief measures that have been put in place to help consumers deal with the inevitable difficulties that this outbreak is likely to cause, and they’re readily accessible to almost anyone. You just need to call, email, or chat online with whoever you make monthly payments to, so you can explore the available options. I’ve provided a list of helpful links at the bottom of this piece that offer help.
Protect Your Credit
The federal relief programs, and programs intiated by individual companies are there to help you protect your finances. But don’t forget about your credit. A single late payment on a credit card, car loan, or mortgage can have a significant negative impact on your credit scores. Having multiple late payments can be a doomsday scenario. If at all possible, it’s best to seek deferments or forebearances wherever possible to avoid having any delinquencies. But again, you have to be proactive, and call your mortgage company, landlord, creditors, and utility providers… Sooner than later.
Regarding your revolving (credit card) debts, the widely accepted rules still apply, but perhaps even more so.
- Keep your balances as low as your budget allows.
- Pay on time.
- Pay more than the minimum payment, even if it’s just a few dollars.
- Don’t apply for a bunch of new credit. (Each credit card inquiry costs you 2-5 points!)
- If you need a loan or line of credit, it’s better to get it now, than after you’re in financial trouble.
Given that the duration of the impending financial events is yet to be determined, you never know when you’ll need your credit, so it’s best to do everything you can to protect it now. If you haven’t yet, this might be a really good time to check your credit. With the upheaval of the entire nation’s finances, mistakes can happen, and you need to be on top of your reports, so any error or change can be addressed quickly, and won’t have a significant impact. Should you find any errors, you can contact the bureaus yourself, or hire a professional to help you.
The following is a list of very current, helpful links that might help you through what is likely to be a difficult time for a lot of Americans. I encourage you to look through the ones that apply to you, and pass along to others the ones that don’t.
Should you have any questions about this, or anything consumer credit or finance related, please feel free to contact me.
Coronavirus Aid, Relief, and Economic Security (CARES) Act
Mortgage companies offering relief
STUDENT LOAN RESOURCES
Guide to Student Loan Options
US Dept of Education
Nelnet Student Loans
Sallie Mae Student Loans
Navient Student Loans
HELP WITH YOUR UTILITIES
Help with Utilities
CREDIT CARD RESOURCES
Help With Credit Cards
More Credit Card Resources
CREDIT BUREAU HELP