It’s the question on everyone’s minds: What’s going to happen next?
With concerns over how long and how deeply COVID-19 might impact each of us, it’s become the most stress-inducing question right now. Millions of people have already suffered financial setbacks. Millions more continue to worry, wondering how much more of the crisis they can weather and remain unscathed as the pandemic continues into the foreseeable future.
Within those numbers, further analysis reveals that even as businesses begin to recover, subsequent waves of infections may set them back again. While some industries have been able to make do by conserving or redirecting resources, the interdependent nature of business and trade means that even a relatively unaffected company’s outlook can rapidly change in short timeframes, leaving workers in radically different circumstances than initially expected.
Whether you’re feeling this stress now or have been fortunate enough to not yet feel the impact, ensuring you’re ready for anything the future brings is still incredibly important. Taking key steps now to develop a backup plan can help alleviate the stress and anxiety that a sudden curveball could deal to your current lifestyle.
Update resumes and cover letters. Have your important career-related documentation current and ready to go so that you can hit the ground running if you need to. Upload hard copies to have easy electronic access, update your website and keep your professional networks active.
Track your expenses, and identify cost-cutting options in advance. Now is probably not the time to be paying tons of monthly fees for subscriptions you aren’t really using. Determine what you really use and cut the fat. Also, it’s important to know how to end services or alter plans or bundles for subscriptions you plan to keep. Some providers may require written notice ahead of time. If you end up needing to reduce costs further, you’ll need to be ready to do it in the most cost-effective way.
Explore opportunities to pick up a side gig. In many cases, workers experience reduced hours or pay cuts rather than complete unemployment. You may still be employed but with more time and less money on your hands. Consider getting an additional source of income established — preferably before you actually need it.
Analyze your available credit. If the worst happens, do you have credit that is available to use? If possible, pay down balances so that you have more available credit later. Home equity lines of credit, personal loans and even debt refinancing may be worth a serious look.
Take the long view by looking at upcoming milestones and life events. Change often comes with considerable out-of-pocket expenses — costs that typically exceed even the most carefully calculated estimates. Prepare backup plans that would let you scale back, postpone or pare down expenses.
Create an emergency fund. Six months’ worth of monthly bills and living expenses may seem like a huge amount, but it represents the length of time most people need (on average) to recover from an unexpected life event or job loss. COVID-19’s restrictions may even lengthen this time further. Begin saving discretionary cash rather than spending it on luxury items.
Tend to investments you’ve already made. This includes not only your 401(k) and investment accounts (that are hopefully earning money) but also your home and personal property. You don’t want to lose the money you’ve already earned and saved, and you don’t want to devalue your home or vehicles by failing to maintain them while you still have the means of doing so.
Have your personal and family affairs up to date and in order. COVID-19 makes getting just about anything done take longer. If you need a certification for something in your field that could help increase your chances of getting hired again, do it now. If your job has benefits, make sure that you’re using them. While even getting vaccines and basic preventive health or dental care, for example, may be challenging due to shortened office hours or reduced services, a job loss could make getting needed care even more complicated and expensive.
Until a vaccine becomes available, the effects of the current coronavirus will continue to stress us—often in ways we failed to anticipate. That’s why creating a backup financial plan to get you through COVID-19 is one of the best things you can do for yourself if you haven’t already.
At La Capitol Federal Credit Union, we see you as a member of our community. We want to give you the means of making the best financial decisions for you and your family because we understand that — in helping you to succeed — we’re helping our entire network thrive and grow. If you’re ready to explore your options to plan for financial security, check out all La Cap has to offer.