8 Steps to Improve Your Finances During the Coronavirus Quarantine
The spread of COVID-19 has forced tens of millions worldwide into quarantine, according to the Financial Times. If you’re one of them, taking steps to improve your financial situation is not just a smart way to prepare for an uncertain future — it can bring much-needed peace of mind.
The Coronavirus Brings Economic Uncertainty
As governments introduce further restrictions and companies send employees home, more and more people are in an effective or enforced quarantine due to the novel coronavirus.
Going into quarantine means different things for different people, financially and otherwise. For some, like the 80% of American parents who hold down a job, it means juggling working from home and watching the kids. For others, it means coping with unexpectedly losing their jobs.
Whether you’re an investment banker, a service worker, a stay-at-home mom of three kids or a single college student, this is a time of financial uncertainty for us all. The pandemic has injured many industries. The Federal Reserve is taking measures last seen during the 2008 global financial crisis. Over half of economists surveyed in a March 12th poll agreed that COVID-19 is likely to cause a significant recession.
With the coming economic impact of coronavirus in mind, now is the time to put yourself in the best possible financial position for the future.
Improving Your Financial Situation While Staying Home
No matter who you are or what situation you’re in, there are concrete and actionable steps you can take to improve your financial situation without leaving the house.
1. Get Help If You Need It
Many government efforts have been made to help Americans struggling in the wake of coronavirus. The CARES Act helps provide aid to workers and those who may have recently lost income.
Government initiatives are not the only resource available for workers facing financial difficulty. Creative Capital, a nonprofit organization that supports artists, has compiled a list of emergency grants for creative professionals in need due to COVID-19. For chefs, servers and other food service professionals, the Restaurant Workers’ Community Foundation is offering help in the form of a crisis fund. If you’re having trouble making ends meet in quarantine, don’t be afraid to seek out aid.
2. File Your Taxes
If you’ve been putting off doing your taxes, you may have been relieved to hear that the IRS extended the 2020 deadline by 90 days. Individuals, trusts, and corporations don’t have to file or pay until July 15. Even so, Federal Reserve Chairman Steve Mnuchin encouraged Americans to file their taxes as soon as possible if they can. “We don't want you to lose out on those tax refunds,” he explained in a press conference. Several state governments have also announced extensions for filing and paying state income tax.
3. Check on Your Student Loans
Acknowledging that loan payments can cause financial hardship in a time of crisis, the U.S. government has frozen interest and temporarily halted payment requirements on federal student loans.
However, this relief effort doesn't apply for non-government student loans. If you’ve lost income because you’re in quarantine or have experienced a job loss, explore different loan payment plans. Deferment, forbearance, and income-based repayment can provide student loan relief if making your regular payment isn’t in the cards right now.
On the other hand, if you’re not experiencing financial hardship, this could be a good time to make progress paying down your loans. Because there’s 0% interest, your payment can go further toward the principal, the initial amount you borrowed. Take a look at your budget to decide if you’re in a stable enough place to make tackling debt the priority.
4. Beef up Your Emergency Fund
There are two main reasons to assess the health of your emergency fund right now.
- Your personal finances might be impacted by quarantine measures later if they haven’t been already. Will you need to tighten your belt to handle lost wages or medical expenses?
- Broader economic uncertainty. Even if your personal financial situation hasn’t changed, the global economy might.
According to most financial experts, your emergency fund should be able to support you for three to six months. If you don’t have a healthy savings account at the moment, consider looking for ways to reduce household expenses and make extra money while in quarantine. If you've already started saving, looking for a high-yield savings account can help you grow your emergency fund over time.
5. Cut Costs at Home
If you need to build savings, it helps to cut costs. Start at home — more specifically, in the kitchen.
- Try creating vegetarian meals. Meat is often the most expensive ingredient in a recipe.
- Embrace beans. They’re delicious, nutritious and cheap.
- Don’t forget seasoning! Simple food, seasoned well, goes a long way.
6. Earn Money Remotely
When you can’t make ends meet, cutting costs isn’t always enough. Solve your cash flow problem in another way by making money with remote work.
Other opportunities depend on your skillset, but there are usually plenty of jobs for developers, marketers and designers on sites such as We Work Remotely.
7. Learn a New Skill
One of the best things you can do to improve your chances on the job market is to build your skillset. For those in quarantine or sheltering in place, that’s entirely possible from home. There have never been so many free online classes available.
Open University’s Open Learn program offers a range of courses aimed at professionals, including bookkeeping, leadership and science. If you’re interested in learning a new language, Duolingo has lessons on commonly-spoken French and Spanish as well as rarer ones like Swahili and Irish. You could also learn a programming language. Code Academy offers 180 hours of coding lessons for free.
8. Lean on Your Network
As many industries take a hit due to the coronavirus, professionals are stepping up and supporting each other. In an inspiring Instagram thread, Marguerite London, a network for women in the arts, connected hundreds of creatives out of work due to coronavirus.
With the benefit of social media, it’s possible to keep networking without meeting face-to-face. Send an email to an old mentor. Ask a colleague if she wants to work together on a project. As more and more people go into quarantine, reaching out to others is not just possible, but a welcome break from the isolation of staying home.
Taking Stock and Looking Forward
If you’re in quarantine due to the coronavirus, or even if you’re just trying to do the right thing and stay home, you know that life has changed drastically and quickly. For some, it’s a time of financial hardship. For everyone, it’s a time of economic uncertainty.
Whether being cut off from your income means accessing aid programs or building a professional network, you don’t have to take it sitting down. Some things are out of your control, and it’s scary, but by taking the financial steps you need to feel ready to face what’s ahead, you’ll feel more empowered and in control.
About the Author
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