Financial Survival Tips for Families During Covid-19 Outbreak

Aaron Velky, Ortus Academy

Yogendra Singh on Pexels

March 24, 2020

Almost overnight, Money Education suddenly became way more important.

In a matter of days, the effects of the Covid-19 virus have landed on more than just our hospitals. Our local businesses, startups, restaurants and bars are all feeling the pinch, which ripples into our pockets as consumers, individuals, families and communities too. Hours are being cut, doors are being closed, and many are scrambling.

So how can we all be a little more secure?

Right now, that calm is Financial Intelligence — knowing what to do in a time that’s incredibly emotion-driven. Financial Intelligence is all about healthy money habits. One silver lining of this shutdown is that it can really help you set good new habits!

Below are 10 important keys to managing your money in a very uncertain time. We invite you to review this guide and share this with anyone else that’s feeling challenged financially right at this moment.

Spending & Essentialism

The first thing we recommend is to make a list of all your current financial obligations, and break them into Essential vs. Non-Essential. Here are some examples:

Essentials- Housing, Car, Health Care, Debt repayment, Utilities, Groceries etc…

Non-Essentials — Restaurants, Bars, Carry Out, Clothes, Shoes, Tech, Social Life, Fitness, etc…

Let’s start with strategies for cutting back the Non-Essentials

  1. Learn to cook bulk meals — Buy ingredients and cook bulk meals like stews, casseroles, soups, stir frys etc… Here are two great resources for ideas of cheap bulk cooking to save money and eat healthier than carry out.

2. Pick up a new hobby — There are many hobbies that are free or very low cost — think hiking, cooking, gardening, playing an instrument, writing a blog, board games, exercise, vlogging, meditation etc… Some of these can even turn into side income, but regardless, doing things you enjoy makes you feel better, and therefore less likely to spend.

3. Watch out for online shopping sales — Everything is on sale right now. AND it’s easy to feel lonely and down on yourself right now, but if you are really concerned about your income & financial situation, then don’t buy things you don’t need! If there’s ever a time to cut back, NOW is that time.

Here’s some help. Our 1 hour mini-course Prime Spending: How to Control Your Spending Online is free and only takes 1 hour. It’s all about how to control the emotional urges to shop online.

Non-essential spending is very emotional, so the more you can work on yourself, the easier it will be to let go of non-essential spending. Staying healthy is also a huge benefit here as well.

Strategies for Bills during Hardship

Now for the Essentials.

If you need immediate help with your bills, contact your creditors right away. Most companies and organizations are offering different types of financial assistance right now. Many are waiving late fees, but you should notify them as best practice.

Here are some strategies to cut back on your essentials

  1. Adjust your housing situation — Can you get a roommate? Move in with someone? Move home with parents temporarily? This may seem drastic, but if it keeps you out of debt, it’s likely worth it — as long as you’re practicing social distancing and doing this in a healthy, responsible way. Additionally, some landlords and companies are helping with late fee waivers, extensions and more. It can’t hurt to *politely* ask for support from your landlord.
  1. For homeowners, consider refinancing — Mortgage rates hit an all-time low in early March. Refinancing for a lower payment depends on a variety of factors, so check out this Discover calculator to see if it’s a good option for you. Financial experts generally recommend considering refinancing if you can get a 0.5% to 1% point drop in your rate.
  1. Contact your credit card company — Capital One, Chase, Citi and Wells Fargo, and some credit unions are encouraging people to call them and see how to help with financial commitments. More will likely join soon. Here’s a list of them and their contact numbers.
  1. Adjust your student loan payments — There will be an interest freeze on student loans going into effect soon. This means that if you defer your loan payments, you won’t accrue extra interest. Contact your student loan provider to see how you can best adjust your payments.
  1. Contact your Utility providers — Many providers are suspending service disconnections and waiving new late payment charges at least until May 1, and will with customers on a case-by-case basis to establish payment arrangements and identify service assistance options.
  1. Car payment — Is it the right time to trade in and downsize? Can you rent your car on Turo? Does refinancing make sense? Maybe not, but these are options.
  1. Consider a personal loan or line of credit — Personal loans range from $10,000 — $20,000 on average and usually have terms of 3–5 years. Having a good credit score is helpful here, but either way, they are usually significantly lower rates than credit cards (roughly 10% vs. 17%). Check different rates from your bank and lenders like SoFi and Payoff.

So we’ll repeat it again. These are emotional times, and poor financial decisions are usually a byproduct of being emotional. The best thing you can do to be financially intelligent is to stay calm and not react impulsively. This is a daily, hourly, and minute-by-minute practice. But it is completely essential for smart decision making.

Take a deep breath. We’re here to help, but we believe in you. You got this.

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Ortus Academy educates families on the behavioral side of money — Financial Intelligence. We’ve been working to empower proper financial behaviors and habits for 5 years.

In response to the Covid-19 crisis, we are launching a TeamHuman initiative making all our online courses available for free (for a limited time).

We are also hosting free workshops on Financial Stability During Uncertainty.

Information on our TeamHuman initiatives can be found at www.ortusacademy.com/TeamHuman

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