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Financial hardships can catch you off guard—and the situation we’re facing right now with COVID-19 is a prime example. Losing a job or having your work hours reduced can create a lot of financial uncertainty, and how you respond can help you get back on track and persevere in the long term.

If you find yourself struggling financially, the following steps can help you respond quickly and move forward with confidence.

Review your budget.

First, assess your current income and any expenses due in the next month. Identify any shortfalls and look for areas where you could postpone spending.

Prioritize your bills.

Some bills you have to pay, so they go at the top of your list. But if you’re in financial trouble because of COVID-19, you may be able to postpone payment on your rent or mortgage or car loan, for example. Contact your lender and see what assistance is available. You’ll need to prioritize health insurance coverage and paying for prescriptions, groceries and other necessities. Keeping the utilities on and your phone connected are also important. However, you might consider canceling or pausing services you can get by without, such as TV streaming, gym memberships and other subscriptions. Make a list of the amounts you owe each month, payment due dates and the interest rates you’re paying on each loan. Now may be a good time to refinance high-interest loans, especially on cars and mortgages, given that rates are at or near all-time lows.

Contact the companies you owe.

If you’re unable to pay your bills, it’s important to let your lenders know before you fall too far behind. Be proactive about contacting your creditors and vendors. Some financial institutions may offer assistance programs and hardship loans to help in certain circumstances, especially right now. If you have a mortgage and are concerned you won’t be able to keep up with your payments, you may want to send a financial hardship letter to your lender outlining any special hardship circumstances that have made it difficult for you to keep up with payments.

Know your rights.

If any of your loans have been turned over to debt collectors, keep a record of any communications you have with them and know your rights to protect against predatory collection tactics. Review any debt repayment contracts to make sure you understand the terms before agreeing—you have the right to request a validation letter from the debt collector and review your options without having to make a decision on the spot. Learn more about your rights under the Fair Debt Collection Practices Act.

Create a plan.

If you need some guidance, a financial counselor at Navy Federal can help you navigate next steps. We can review your options for consolidating debt and creating a debt management plan for repaying your creditors. Find more details on our COVID-19 FAQs page.


This article is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.