Senate Cents: A Financial Wellness Blog

Never in a million years would you have made a specific financial plan for a new virus to disrupt the global and local economy– or your paycheck. Unfortunately, many are feeling the uncertainties and the effects of the coronavirus pandemic along with the consequences impacting countries around the globe as well as our neighboring local businesses.

Life has thrown us a curve ball, so we’d like to share some financial tips that can ease your worries and better prepare you for any uncertainties and disruptions that may lie ahead.

Whether you’ve successfully heeded the tips and built an emergency savings fund, or you have yet to start, today we are facing circumstances we never imagined.  We have talked about emergency savings in terms of car repairs and medical bills, not in terms of global pandemics. However, the fact is, this is the environment we are faced with today.  So what can you do to take control?  Here are five tips you can follow now:

#1 – Assess Your Income

It is time to take a fresh look at your income. Really, take a good look at it. Are you taking out “extra” taxes just so you can receive a refund next year?  Is there room to shift some of your long-term savings into short-term savings for the time being?  Maybe lowering the amount of pre-tax dollars you are putting into retirement savings, at least down to what your company matches, or reducing the dollars you are devoting to a college savings account. If you are feeling the pinch, you can switch these temporarily to benefit your current situation and then switch them back to your usual contributions once the environment stabilizes.

#2 – Manage Expenses

Now is the time to take a very hard look at your expenses and determine what you can live without to free up money in your monthly budget. Temporarily canceling or downgrading subscriptions or eliminating non-essential purchases until you reach a comfortable expense level. 

You can get started with this by categorizing your expenses into essential bills you need to pay, such housing, food, utilities, medicine and debt.  Then list your non-essentials expenses such as entertainment, gifts, subscriptions, etc.  These non-essential expenses are the first to be eliminated, but you can also audit your essential spending such as groceries, energy costs and transportation to find places to shave dollars and save even more. Granted, your spending will most likely look a bit different now. You might be buying a few extra items at the grocery store but you likely will not be going to the movies.  And, if you are working from home, your transportation expenses such as gasoline are likely to be less.

#3 – If You Have Loans, Talk to Your Creditors

If you are worried about paying your bills during this time, talk to your creditors to determine what, if any options, they have to help you. Many financial institutions – including USSFCU – have designed assistance options to meet the needs of their customers and members. Waiving and refunding certain fees and penalties, providing flexible payment options for loans and providing loan extensions in certain situations are a handful of ways we at USSFCU are helping.

Take a few moments to prepare before you contact your financial institution so you can clearly communicate your needs:

• Ideally, call BEFORE your payment is due if you will struggle to make the payment.
• Be ready to share why you are unable to pay, and how long you expect this to be the case.
• Determine what you can reasonably pay during this time of difficulty; offering to pay some portion of your payment will go a long way with many financial institutions.

Also, don’t hesitate to reach out to your landlord or utility providers. Many companies are making provisions for this pandemic.

#4 – Utilize your Employer and Your Benefits plus Other Supporting Services

In most cases, your employer has been communicating options available to you, such as working from home and staggered schedules, as well as the income compensation they may or may not be able to provide at this time.  If solutions are still being designed, propose a work-from-home solution or ask about using vacation time, paid time off, or paid sick leave, to sustain your income if you are experiencing an interruption in your ability to work. If you do not have any time left or your company does not offer those benefits:

• Find out if your situation is covered by short-term disability insurance.
• Ask about emergency leave policies.
• Ask about Employee Assistance Programs (EAPs) or other benefits to find out if your employer can connect you with resources for mental and physical health, financial wellness and other surrounding supportive services.

#5 – Seek the Assistance of a Financial Counselor

If things do get rough, avoid high-cost alternatives to get cash such as running up high-interest credit card debt, using payday loans with even higher interest rates, and or withdrawing retirement funds (you’ll lose out again when it’s time to retire!) These types of actions can often leave you in a worse position than you were in during the crisis thanks to fees, penalties, taxes, interest and more.

If you are experiencing a temporary disruption to your paycheck, or a longer-term income loss from layoff or job loss, a financial counselor can help you figure out your plan. You will benefit with an objective (and knowledgeable) set of eyes walking you through your entire financial picture and help you identify options that can relieve stress and make it easier to bounce back.

United States Senate Federal Credit Union is partnering with GreenPath Financial Wellness, a leading national nonprofit organization, to address critical needs among community individuals and families impacted by COVID-19 pandemic measures.

“Our hearts go out to everyone who has been impacted by this crisis. We know that many of our families and neighbors are concerned about their financial welfare,” said Timothy L. Anderson USSFCU President and CEO. “If COVID-19 measures are affecting your income, you’re not alone. Together with GreenPath, we have put programs in place to provide needed assistance and help ease financial stress during this extraordinary time.”

Through the partnership, USSFCU offers free phone based GreenPath financial counseling. GreenPath’s counselors will assess an individual’s entire financial picture and identify options that can relieve stress and make it easier to bounce back.

GreenPath’s team of certified credit counselors are here to help you prepare for and navigate the financial effects of COVID-19. For more information on what individuals can do to manage finances affected by COVID-19, visit www.greenpath.com or call 877.337.3399.

About GreenPath_TM

GreenPath Financial Wellness is a national nonprofit organization that provides financial counseling, education and products to empower people to lead financially healthy lives. Working directly with individuals and through partnerships since 1961, GreenPath has assisted millions of people with debt and credit management, homeownership education and foreclosure prevention.

To learn more about these and other ways USSFCU is reacting to the COVID crisis visit ussfcu.org/covid19.