There are two keys to managing your finances through the COVID-19 crisis: One is communication. The other is hustle.
First, communication. Your creditors certainly know what’s going on in the world, and their other customers are affected by COVID-19, too. Financial institutions and other businesses have crisis plans for dealing with calamities. Reach out to them and see what they can do to help you, and if they’ll work with you to get through this. Your creditors – including the landlord or mortgage company, credit card companies, vehicle lenders, utility companies, and internet providers – want you back on your feet as soon as possible. That way, they’ll eventually get their money.
But you must make the first move. Doing so shows that you’re a responsible person who has been adversely affected by the pandemic. Otherwise, you could come across as a deadbeat, and that’s the last thing you need right now. Call them.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act put in place two protections for people with federally backed mortgages: a foreclosure moratorium and the right to forbearance for up to 12 months. Forbearance is a suspension of payments, with interest accrual also suspended and no penalties during the same time frame. You’ll still have to make the payments, but with luck you’ll be in a better financial position to do so when the forbearance period ends. Even if your mortgage isn’t backed by the federal government, you might have relief options from your lender or the state. Make sure you call the right institution. You need to call your mortgage servicer, which might not be the same institution that originated your loan. Check your records; whoever you send your payment to is your loan servicer.
The second key: hustle. If you’ve lost your income because of COVID-19, do what you can, within the limitations of your situation, to earn money so you can pay at least something toward your bills. It reinforces the message that you’re a responsible person and are doing your best in a bad situation.
There are lots of “work from home” possibilities out there, which might not pay as much as your old job did, but it’s income. And it’s something for you to do while you’re stuck at home, which can help with your mental health.
Many businesses deemed “essential” and still open are hiring, some because regular employees are at high risk for infection and need to stay home and others because their business is booming. Grocery stores, restaurants doing curbside and delivery orders, and fast-food chains with drive-thru windows are hiring. It might be a big step down from that corner office you once had, but it’s honest work that pays. And you could set an example for someone else.
These are challenging times that require sacrifices and tough decisions. Don’t let your ego stop you from helping yourself and your family.
- Sources for mortgage relief information:
- Sources for credit card payment relief:
- Coronavirus credit card payment and debt relief: How issuers are responding to COVID-19
- Capital One
- Millions of Americans entered coronavirus pandemic with credit card debt
- Credit card issuers offer customer assistance in response to coronavirus
- Can’t Pay Off Your Credit Card Due to Coronavirus? Your Bank May Be Able to Help.
- Coronavirus: What to do if you’re unemployed and have credit card debt
- AARP Answers: Your Credit Cards and the Coronavirus
- Credit Card debt problems could last years after coronavirus pandemic
- Sources for utility bill relief information: