With many businesses closing their doors (forever) in the wake of COVID-19, a significant percentage of our nation is currently unemployed. Many other people are “under-employed” right now, and it’s a short trip to go from reduced hours to zero hours. Getting fired is a crippling blow to many families, both financially and emotionally, but there are things you can do about it (besides trying for unemployment). Here are some helpful things you can consider when your services are no longer needed.
Cut Your Losses
So what’s the first thing to do when you get furloughed or fired due to a disaster, economic crash, or pandemic? When the axe falls on your job, cut your losses. You’ll need to take a very hard look at your finances and determine the things that are essential and the things that can go. Stop eating out at restaurants. Turn off your cable or satellite television. Cancel those memberships you aren’t even using. Most Americans are suffering a financial version of “death from a thousand cuts.” We may have a few large bills each month, but it’s all the little things that really take a toll on our budget. If you really want to minimize your losses, you’ll even cut out your vices. Stop smoking and give up drinking alcohol, coffee, and soda. I know this is a lot to ask, especially during the stressful times of job loss, but these little savings can combine to have a big impact on your finances.
Embrace Food Security
You know that stockpile of long term food you’re supposed to have? Job loss is one of the most likely scenarios that would cause you to dip into it. The average American household spends between $300 and $500 dollars on food each month. Since these statistics include the very poor, it’s safe to say that middle-class households spend even more each month (I know we do). That’s a lot of money, especially when none is coming into the household. That’s also a lot of food (2,000+ calories per person per day). The best way to secure food in this type of crisis (and many other scenarios) is to have food on hand already. Staple food items like rice and pasta are long-lasting, filling, and cheap. Stock up when times are good, and you’ll have plenty when times get tough. If you didn’t do this, then consider hitting a local food bank or church pantry. Don’t let a head full of pride give your children an empty belly. Those charitable outlets are there for just such an occasion.
Create A Hustle
For those who are willing to work and don’t have too inflated of an opinion of themselves, there’s usually work to be had (but it’s probably not going to be in your chosen field). I was speaking with a friend recently about the government furloughs of 2019. He was out of work from a sophisticated white-collar job but went looking for work immediately – in all sectors of the job market. He landed a job with a moving company and made some quick income while many of his colleagues sat idly and watched their savings dwindle. Don’t be too proud. Take whatever you can get. If you’re not too worried about the pandemic and you have a functioning vehicle, start driving for Uber or Lyft. If you have an old skillset that is now in demand (like construction), dust off your tools and look for a job. Turn your current side hustle into a full-time gig or get a brand new job. If you want the money badly enough, you’ll find some way to get it. You may even have to start selling off possessions. Just make sure it isn’t anything that you can’t live without.
Battle of The Bills
How do you figure out which bills to pay first (or at all)? Remember your survival priorities. In the wilderness, they go shelter first, then water, then fire, then food. Overlay that on our situation, this means that your mortgage is more important than the cable bill, and your water bill is more important than your mobile phone service. I know this will be a tough sell for certain family members (especially the kids), but it’s a necessary hierarchy. Pay your mortgage, electric bill, and water, then let the others fight over your financial scraps. You can certainly call the different companies involved to ask for different payments or other options. It doesn’t hurt to ask.
Build An Emergency Fund
After the furlough of 2019, which had a major impact on my household, I damn sure created a dedicated emergency fund. I had built up funds like this before, only to knock them back down when someone in the family needed a big-ticket item. Not anymore. I keep a fixed amount in an account just for emergencies. I don’t touch it for any other reason. Now, this isn’t something you can put together while you’re broke, but when that money does start flowing again, pay “yourself” before you pay anyone else. This isn’t money wasted on some frivolous expense. This is your “rainy day” fund, and it should be used only for that purpose. Consider a local credit union for the bulk of the fund (for easier access) and keep a secret cash stash at your home (for those spur of the moment emergencies). Start off with any amount you can earmark for emergencies, then build up your fund to an amount that covers one month’s mortgage. If you can, keep building it from there. For once, you’re not pissing away your extra money on a trip or something flashy, this money is for you to have a cushion in a time of need. And it is buying you something. It’s buying peace of mind.