The Covid-19 pandemic is still top of mind for most people. Whether it’s family, job, health or financial, everyone has concerns. I’d like to walk through some of our personal finance concerns that many people are also feeling.
As with most things in life, you can only control what you can control. The way I like to look at problems is to determine what’s the worst-case scenario for a particular situation. I look at it one problem at a time. The entirety of the situation may be overwhelming but when you break it down to a single problem, it’s easier to develop a solution.
If you are single, reach out to someone you respect and trust to discuss your situation. They can give you honest feedback on your problems and solutions. In fact they may be able to offer different solutions that you haven’t even thought of.
If there is a significant other in your life, they are walking a similar personal finance path that you are. You must communicate! For one person in their relationship, finance may not be their “thing”. It doesn’t matter. You won’t come up with an effective solution unless you’re on the same page. That only comes with communication.
Next step – look at your budget. If you don’t have one, now is the time to make a realistic one. Look at your expenses. Will you have enough income to cover your necessities? If yes – good. If not, determine where you’re short. You might need to prioritize what you can pay (food, shelter, medical, transportation). If you can’t pay your rent/mortgage or other obligation when it’s due, proactively reach out to your landlord/lender and explain the situation. Communicate – it’s important. They will work with you if you’re honest with them. Continue to prioritize what expenses you can pay based on the income you have. Be honest with yourself. Some things you consider necessities are really luxuries (the best wireless plan, cable bill with all the extras, the biggest most expensive vehicle).
A budget, as negative and onerous as it sounds, can be quite liberating in times like this. The knowledge of what you can and can’t afford helps you make decisions. When you are in control of a situation and not feeling victimized by it, you feel a lot less pressure. The budget can be and should be adjusted during financial stress. Maybe you had been budgeting extra to pay your mortgage (or vehicle) off early. Consider going back to the minimum payment temporarily. Once this crisis has passed, you can reassess your budget to see what needs to be readjusted.
In summary, during any financial crisis:
- Do an honest assessment of your situation.
- Communicate with your partner (find a financial partner if you don’t have one) and come up with a plan together.
- Proactively communicate with your lenders – don’t wait for them to call you.
- If you are in control of the situation, the stress will be less.
You will need to do what seems right in your situation. Remember, handle your money, your way.
Leave a Reply