If you've been laid-off because of the Coronavirus pandemic, know that you're not alone. The US Bureau of Labor Statistics (BLS) published a report for March 2020, noting that unemployment claims have risen by 4.4%. Since then, other sources like the New York Times claim US unemployment may be as high as 13%.
But numbers aside, let's talk about you as an individual. If you're wondering what steps you should take because you lost your job because of Coronavirus, we're here to help. From filing for unemployment to paying off debts, we've put together an outline of actionable steps you should take.
1. File for Unemployment Immediately
We're assuming you were laid-off from a traditional wage-paying job, which withheld federal and possibly state taxes from a regular paycheck. If that's the case, do an internet search for "unemployment in (your state)" and get filing ASAP!
- Know that these turbulent times have caused strains on many state's unemployment websites.
- Try not to get frustrated. If the website "locks up" or kicks you out, keep trying!
- The sooner you finish filing, the sooner you'll get a check / deposit.
Traditionally, unemployment benefits were 55% - 79% of your usual pay, depending on your state. But that's changed (for now). You'll likely receive benefits close to your usual pay, up to a certain cap, depending on your state. So expect tightened finances, but don't panic. Once you've got that process finished, tally up your cash on hand.
2. Count Your Cash
Tally up your checking and savings accounts and look around for more money you have at hand. If you have change jars, now is the time to roll your change or turn it in at a coin machine.
- Avoid the coin machines that take a percentage - like the ones you'll find at department stores and grocery stores. They keep as much as 10% of your money.
- Use the machine at a bank or credit union instead.
- If you're practicing social distancing, it might be best to get coin tubes from the bank and roll your change at home.
Once you know how much cash you have to work with, you can start creating a budget.
3. Create Your New Budget
Add up all your usual bills and map out their due dates on a calendar:
- utilities, cell phones, internet costs
- credit card payments
- auto loans, insurance, and fuel costs
Note that you'll be spending a little less on the work commute and the daily expenses you might have incurred while working. This should help fill in the gaps between your usual income and your unemployment earnings. See, you can do this!
4. Cut Your Costs
There may be some costs you can cut right away. Look for:
- on-demand streaming services that you don't use
- "prime accounts" or memberships that aren't worth the cost
- enhanced data plans on phones - as long as you don't use them
If yours is a multi-car family, you might consider taking one or more cars off the road and reducing their insurance. We would NEVER tell you to drive an uninsured vehicle. But if you're insuring four cars and can get by with two - for now - it's worth looking into. Know that some states will penalize you for having an uninsured vehicle registered - so check with your DMV and "non-op" your other vehicles. You might save hundreds every month!
If you have several months’ worth of living expenses put aside for emergencies, this would be a good time to pay off any smaller debts. That way, you won't be stuck with payments and interest as these months pass. However, if you're not in that position (most Americans aren't), be sure to pay at least the minimums on all your credit cards - on time - every month.
We know these are unprecedented times that we're all living through. And we're all in this together. We hope you've enjoyed our money management tips during a time of crisis.
If you're concerned about paying down your debt or accruing interest during this time, talk to one of our Financial Experts to explore your options.