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Tips to Save your Financial Life from Coronavirus
Tips to Save your Financial Life from Coronavirus

9 Tips to save your financial life from Coronavirus

In this article, I will outline 9 essential tips to save your financial life from COVID19. I know your main focus is to remain healthy.

Here are are a few tips to protect your health from coronavirus:

  1. Wash your hands for 20 to 30 seconds after you get back to your home.
  2. Use a hand sanitizer before or after touching anything.
  3. Wear a mask before going outside.
  4. Wear gloves to avoid any kind of contamination.
  5. Maintain social distancing as much as you can.

Well, even a 7-year old kid can tell you these tips.

But what about your financial life?

Like health, your finances are equally important to you. And, you must take steps to safeguard it from CoronaVirus.

A few months back, several articles were published on the steps you must take to sustain the next recession. Many people didn’t bother at that time. Several people even said that the recession wouldn’t hit the country back then.

Look where we are now. The recession has hit the country and the whole world albeit too soon. The reason is CoronaVirus.

People have lost income and frail businesses have collapsed. We don’t know when the world economy will revive again.

Here are some tips that can help you to protect your financial health both in the long term and short term.

1. Call your lenders if you can’t pay bills right now

Don’t have money to pay bills right now? Well, that’s a major problem because delinquent bills will hurt your credit score.

Check out your lender’s website and find out if there are any kind of relief measures available for the cash-strapped borrowers. Most lenders and credit card companies are offering some relief measures due to the government’s insistence.

Still, if you don’t find any helpful information on the website, then you can call the customer care executive. You’ll get the phone number from the website itself.

Once you reach the customer care executive over the phone, explain your current income, assets, and expenses to him. Tell him your current job scenario and how much you can pay on your bills. If you have lost your job or income, mention it. Also, explain when you may be able to make payments again.

Based on all the details you have given, the customer care executive may give you the following options:

  • He may cancel the over the limit fees and late fees.
  • He may allow you to skip payments for a few months.
  • He may agree to reduce your interest rate.

All these options can help you regarding bill payments.

2. Contact credit counsellors or debt relief companies

If the lenders are not ready to cooperate with you even during such a crisis, then you can contact authentic credit counselling agencies.

They can suggest various ways to handle debts and overall finances and will also recommend a budget plan to save money during the pandemic. Or even offer a debt management plan to you. But in that case, you’ll have to pay a nominal fee.

If you have a home loan, and you can’t make payments on that, then contact HUD-approved housing counsellors for a discussion on various repayment plans. They can explain forbearance and the ways to avoid foreclosure for the time being.

As far as auto loans are concerned, you can get help there too. You can call the loan servicer and ask if an affordable repayment plan can be arranged. If nothing can be done, then ask if the payment date can be extended.

Non-profit credit counselling agencies are also there. But in that case, you need to check if they are genuine. Scammers are more active than ever now.

Your other option is to contact debt relief companies. To maintain social distancing, you can watch out for the companies that offer debt relief services online. These companies can use their sharp negotiation skills to fetch a good repayment plan for you.

3. Build a fat financial cushion for the uncertain future

If you haven’t created an emergency fund yet, then now is the best time to do it. Do whatever it takes to beef up your emergency fund.

Most places are shut down now. This includes shopping malls, theatres, night clubs, etc. So, there is no eating out or parties or shopping nowadays. You’re saving a big amount in those sectors. Use that money to set up your emergency fund.

The next 6-7 months will be extremely stressful financially. The whole of 2020 is in the danger zone. Save as much money as you can.

Once the government relief programs expire, you can use this fund to survive. Use the stimulus checks, tax refunds, and any extra money you get to save 6-7 months of expenses in the emergency fund.

4. Stop paying on student loans in the next 60 days

Do you have federal student loans?

If so, then stop making payments on them until September 30, 2020. The payment suspension has been introduced without any interest or penalty. Moreover, there won’t be any garnishments or tax refund offsets during this period.

Save the amount in your emergency fund. Don’t waste it. Keep it for your future use.

Hopefully, the world will be COVID FREE by September 2020. The economic health of the country will start recovering at that time. Hopefully, the wounds will heal.

5. Protect your stimulus check from the debt collectors

The CARE ACT is an instant hit not only with the debtors but also with debt collectors. They are looking at your stimulus checks with a hungry eye. You need to protect the money by all means.

By law, debt collectors can’t garnish your Social Security benefits and VA benefits.

But what about the stimulus checks?

The federal government has not given a clear directive regarding it.

Fortunately, several state and local governments have already implemented emergency rules so that debt collectors can’t garnish government funds. Others are on the way to introducing such laws.

Until everything gets confirmed, you can do a few things to protect your stimulus checks. Direct the stimulus checks to prepaid cards or accounts in a small credit union. These accounts are not exempt from garnishments. However, debt collectors often overlook small accounts.

6. Look at your credit report and see if it is all right

Plenty of financial relief programs have been introduced already. If you have already joined a repayment plan, then check the status of your account in your credit report.

Find out if everything has been reported correctly on your credit report. If there is any discrepancy, then dispute the account status with the credit bureau. Even credit bureaus are working with reduced manpower, so mistakes are likely to happen. Make sure you check and correct all the errors.

7. Ask the government for unemployment benefits

Did you lose your job due to the quarantine effect?

Well, in that case, you can get support from the state and federal government through unemployment benefits. The amount will be decided by the state government but the federal government will give you an extra $600 until July 30, 2020. You’ll get benefits for an extra 13 weeks.

8. Use mobile banking apps instead of cash

This is the time to go for cashless transactions. Download the mobile banking apps for doing the necessary financial transactions.

You can pay bills, check account balance, and transfer money to someone else through the app. Keep your bank statements in front of you while registering in the app. You’ll need to enter your bank account number in the app.

Don’t hesitate to register a complaint if required.

If you face any issue with a financial service or product, then report it to the company directly. Explain the nature of problems that you’re facing. Give answers to their questions so that they can understand the loopholes of their products, and work on them.

You can also report the issue to the consumer watchdog CFPB. They can help you to get connected with the company and solve all the problems. Usually, it takes around 15 days to get a response from the CFPB.

9. Watch out for scammers

Scammers are also trying to snatch money from you in various ways. Beware of emails, texts, and links to websites having updates about coronavirus.

All the emails and websites are not genuine. Once you click on those links, scammers will get access to your smartphone or laptop, and hack your confidential details.

Don’t give your debit or credit card account details to anyone for paying bills online. Avoid having video chats on various platforms as scammers are also trying to hack your personal information from there. Install those apps and clear your browsing history to stay safe.

Conclusion

So, these are the few tips to protect your finances amidst CoronaVirus.

Please note that customer care executives of credit card companies, loan servicers, and credit counsellors are receiving thousands of calls every day. You may find the line engaged several times. You need to patiently wait for your turn. There is no other way out.

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About Stacy Miller

Stacy B Miller is associated with a Cal Bar registered debt law firm as a content editor. She writes articles on various types of financial topics to spread awareness amongst consumers regarding their financial rights and privileges.

2 comments

  1. Thats another awesome article from you, Stacy. Congrats!

  2. Thank you monetize for such helpful tips.

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