Saving During Covid-19

By Katrina Esco
People’s Trust Federal Credit Union

About three weeks ago I attended a luncheon where financial expert Lynnette Khalfani-Cox discussed financial planning. During her presentation she highlighted how few people are prepared for what she calls,“The Dreaded D’s” –death, divorce, disability, disease. Unfortunately, at the time, none of us knew how quickly we would be faced with the last one, disease. And none of us imagined we would be facing it in the form of a global pandemic. Yet, here we are.I acknowledge it’s late in the game to talk about preparing for an emergency. The emergency is now. While we look forward to the federal relief on its way, here’s what you can do today (and every month from here on):

1. Tally up your monthly expenses.

· How much is going out

· Where is it going

· What day is it due

Do this for next month. This month is already over.

The easiest way to do this is to keep it simple: list the essential and put the dollar amount next to it. List anything that is a priority for you and how much it will cost for the month. When you’re done, add the amounts together and circle your total.

2. Tally up your income.

· How much do you have right now

· How much is on the way (and from where)

· When is it coming

Do not freak out right now. You need your brain to get through this part. Add up your income then plug the numbers into the following equation:

Income – Expenses = Your Situation

If you have any money left after subtracting expenses from income, that’s great. You’re probably going to be ok. If you break even, start looking at what you can cut. Your priorities will change when you review your expenses and you may begin to see things you can skip for the month to free up cash.

If your expenses are greater than your income, here’s what to do:

1. Eliminate any expenses you can. Move payment dates. Negotiate reductions on fees and interest. Keep track of due dates and communicate with your creditors even if it’s to say nothing has changed.

2. Call your financial institution and see what options are available. In response to the pandemic, my company has made emergency resources available to our members including relief loans with no hard credit pull, skip a pay on auto loans, and no penalty on CD withdrawals. See if your financial institution offers similar aid.

3. Barring any major obstacles, find another revenue stream. Sell something. Provide remote services. Take on a part-time role with companies hiring through the pandemic. Don’t stop looking until you land something.

4. Lastly, imagine the worst-case scenario and make a plan for it. Be sure to ask for help.One significant benefit to evaluating your situation is the sense of control it brings. You’ll either realize things are not as overwhelming as they seemed, or you’ll discover a misstep quickly enough to prevent it or recover from it. This is a basic, but solid exercise that will get you through the next month. We’re not entirely past planning but we are past planning without acting. Once you take stock of your situation take the first step.Bio – Katrina Esco is an account executive on the business development team at People’s Trust Federal Credit Union. She partners with businesses to bring Financial Wellness at Work, a free benefits add-on designed to help employees achieve financial prosperity