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The nearly-global shutdown caused by coronavirus is an unprecedented measure. It’s saved lives, but the financial fallout will fall heavily on the economy. With entire industries shut down, millions of people have found themselves unable to work, while others may find their income affected by the growing chances that a recession will follow, even as economies open back up.
Families around the world are dealing with the financial shock of the coronavirus and the repercussions may be with them for a long time to come. However, with smart financial planning and a head on your shoulders, there are ways you can navigate these unprecedented issues and come out fine in the end. If your family has lost income, these steps can help you manage the financial outcome.
Speak to Your Bank and Lenders
The unprecedented scale of the crisis means that banks and lenders have been more understanding about financial hardship. In many places, you can get in touch with a bank and ask for a mortgage deferral, allowing you to skip payments and tack them onto the end of your mortgage.
If you owe substantial sums to a lender such as a credit card company, you may be able to deal with them on a case-by-case basis to set up an emergency plan, relief from interest payments, or persuade them to accept partial payments.
Access Financial Supports
The financial supports available to families affected by the coronavirus differ significantly from one jurisdiction to the next. Research the options available to you, including Employment Insurance or special supports being implemented by your local government in response to the crisis.
Use a Line of Credit
If you don’t have emergency savings (or you don’t have enough), you may want to consider using a line of credit. A line of credit is an open-ended loan that you can borrow from when you want or when you need it. You can get your limit raised when your credit is good and you have an income. Unlike a personal loan, there is no set schedule for repayment, but like a credit card, you must make interest payments on the loan.
Control Your Spending
Adjusting your lifestyle to a loss of income can be difficult, but controlling your spending will help you stretch your emergency savings further and curtail how much you need to borrow. Especially in uncertain times, it can be hard not to make panic purchases. Spending money out of fear can quickly blow a hole in your budget.
Call a Credit Counsellor
Prolonged loss of income can become an issue if you need to keep borrowing to make ends meet. As debts mount, it can impact your financial health even long after you’ve gone back to work. Debt repayment can take a big chunk out of your budget, something many people can’t afford.
A certified Credit Counsellor from a not-for-profit credit counselling agency can help you find a solution. They can assess your finances and propose a solution to help you get out of debt, such as debt consolidation loans and Debt Consolidation Programs.
The global pandemic is affecting every family differently. Not only are you not alone, but there are also many ways you can get support to manage your finances.