Protect Your Finances in Hard Times

By Ann Lloyd, Student Savings Guide

It’s been almost a year since many of us have felt truly safe. We’ve been beset by a global pandemic, civil unrest, and, amidst it all, financial uncertainty.

We have limited control over those first two elements. We can wear masks and socially distance to shield ourselves from the coronavirus, and we can do our part to find common ground and exercise compassion when dealing with our fellow citizens. But somehow, things still feel largely out of hand.

We might feel overwhelmed by financial demands, too, and some factors may be beyond our immediate control. But we can still take steps to find firmer financial footing and work toward a more secure future — even in an unsettled present. 

Weather changes in your employment

For many, the employment picture has become a major source of stress and uncertainty during the past year. Many businesses have closed, and a survey of Yelp data showed that 60% — a majority — had closed down permanently. Unemployment claims hit a five-month high in January 2021.

You may have been laid off or furloughed as a result of the pandemic, and even if you weren’t, your job description may have changed. Maybe you started working from home or saw a reduction in hours. Or maybe you had to assume new duties as your company stretched its staff’s capacity amid downsizing.

In light of these changes, it’s important to expand your skill set to keep yourself relevant. Ask your employer about cross-training opportunities, and bolster your all-around proficiency by seeking out online courses and how-to videos. Look for side jobs and contracting work, too: The “gig economy” has grown by 15% since 2010.

If you’re in a traditional job, check in with human resources about changes in job status or duties that might be expected in the near future. And don’t be afraid to ask for information about financial assistance, wage investment programs, retirement options, and insurance packages that are available through your company.

Get proactive with your finances

Take stock of your overall financial picture with an inventory of everything from your budget to your retirement plan, from your insurance to your bank account.

There are plenty of financial management tools available to you, ranging from banking apps to budgeting software and beyond. For example, in uncertain times, managing and maintaining your credit is critical. You’ll need a credit cushion now more than ever. Under federal law, you’re entitled to a free credit report each year. Take advantage of this opportunity so you know where you stand.

If you find yourself in difficult straits, pursue opportunities for government aid. Two rounds of stimulus payments have gone out to qualified taxpayers. If you haven’t received yours, you can check its status and how to proceed via this IRS site online. 

Do some research and be aware of your options. There’s also other tax relief available, such as filing deferments and economic impact payments. Check into unemployment insurance and student loan relief, if they apply. 

If you’re a renter, know your rights, and whether you’re protected by a government moratorium on evictions. Check with lenders to see whether they’re willing to be flexible on your debt by allowing you to skip or delay scheduled payments. Ask your bank to waive ATM fees, late fees, and overdraft penalties.

Scrutinize your insurance

Insurance is important during the best of times, but it’s even more critical during times of crisis.

Take account of all your coverage, whether it’s home, health, or automobile insurance. Some insurers offer discounts for bundled coverage; see whether this might work for you. Study your policies to make sure they don’t overlap and you’re not paying too much as a result. Know what needs different types of policies serve, and how health and car insurance coverage differs by situation.

There are other types of backups you also might want to consider. If your livelihood depends on electricity, you can’t afford to lose power. A backup generator is a modest investment that can keep you operating in uncertain conditions.

Protect your retirement

When you need to tighten your belt, it’s tempting to stop paying into your 401(k) or other retirement account. But don’t let uncertainty in the present threaten your future. It’s never a good time to pull the plug on retirement savings — but you can take this opportunity to reassess the kind of saving you’re doing.

Check with your employer to see whether your company is offering, or planning to offer, new options that fit your situation better. Consult your financial adviser for expert advice, so you can be sure of your future, even if your present seems uncertain. If you’re nearing retirement, your adviser can tell you how feasible it would be to call it a career — and when.

The past year has strained our economy as a nation, and our individual finances, as well. But even amid the stress and sorrow of civil unrest and the spread of a deadly virus, there are things we can do to minimize the impact of national and global crises on our lives. 

As we look ahead, we can take action to keep our ship afloat as we right our course and sail toward a brighter future.

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