COVID-19 has caused businesses to close or reduce staffing, forcing many households to live on reduced incomes. While a sudden, unplanned change in lifestyle like this can be stressful, there are strategies that can help make the adjustment easier.
Tips for Landing on Your Feet
Here are some tips to successfully manage the transition to one income for you and your household:
- Update your budget. Compare your monthly expenses and new income situation, making an effort to lower or eliminate costs wherever possible. For example, commuting and child care costs may be reduced during this period. You may also be able to cut back on monthly loan payments by refinancing your mortgage or refinancing your auto loan at a lower rate.
- Look into unemployment benefits. The Coronavirus Aid, Relief and Economic Security (CARES) Act expanded unemployment benefits for laid-off workers and those with reduced hours due to COVID-19. Unemployment benefits were also extended to self-employed and gig workers, who were previously ineligible. You can start the process by filing a claim with your state’s unemployment insurance program.
- Pay down debt. Keep up your credit card and other personal debt payments—even if you’re only able to pay the bare minimum. If you have a lot of credit card debt, consider transferring your balance to a card with a lower interest rate. You may also have the option to defer some payments (such as federal student loan payments) or get a loan extension.
- Seek out low-cost activities. With many dine-in restaurants, entertainment venues and sporting events closed or cancelled, it may be a good time to try out some free or lower-cost alternatives. Keep yourself and your loved ones entertained with family walks, board games and movie nights from your favorite streaming service.
- Tap into your emergency fund. If you have money set aside for a rainy day, withdrawing from it now could ease the financial burden of living on one income. Then once your personal finances improve, you can begin rebuilding your emergency savings.
One Income or Two, We Can Help You Reach Your Goals
Looking for more guidance on dealing with the current economic downtown? Navy Federal Credit Union has helpful resources to help you effectively manage your money now and in the future.