8 Steps To Take NOW For The Health Of Your Finances
There’s not a single person who can say they aren’t affected by Covid-19 in some manner. Whether it’s directly financial, childcare related, health issues, caring for someone else, or something else, it’s affected everyone in some manner or another.
For many, it’s a direct financial hit. It might be because of self employment shut down, slow down or employee lay off, but regardless the reason, protecting your cash stance right now is one of the most important things you can do for your family (and business if you own one). Follow these 8 steps to keep your family financially secure.
Call all creditors and ask for a delay in payment, interest and penalties. Most are helping right now and some even right out offering to suspend payments and interest, but you need to make that call, they won’t call you! Here’s the thing - CASH IS KING/QUEEN - Even if you can ‘afford’ to do this but have zero emergency fund, make these calls now and start piling up cash for the future months in case your situation changes. Here’s your exact script:
You: Hi, I'd like to talk to someone about my interest rates, minimums and recent late fees. I’m being directly affected by Covid-19 and I'm really having difficult times. I’m afraid I'm losing pay (or clients) for a few months now with everything going on. I've been a loyal customer for x years and I'd love to continue doing business with you, but I'm really struggling right now with my budget. Can you help me suspend minimum payments and reduce my interest rates? I don't want to keep falling behind.
Them: Let me check...
You: Thank you so much - use a lot of butter and honey!
Them: M’am, I see you've been a loyal customer for xx years and blah blah blah - I'd like to offer you a reduction to 10% interest for 6 months (hopefully better but...) Will that work?
You: Wow, thank you so much. I'm sure it will but is there anything else you can do? Can you possibly lower it to 5% or waive my minimum for 60 days?
Them: Let me check with my supervisor....
You: More butter and honey....
Them: M’am, good news.....here's what we can offer you right now to keep you as a valued customer.....(hopefully this is better).
If you don’t get the desired result, it’s ok. Don’t get frustrated. Just make a note and call back again in a few days to get someone different.
Go through your budget line item by line item and pick out your 4 walls (shelter, food, utilities, transportation). These are what you pay first. Everything else is extra. I am recommending in this case that if you have lost all income or revenue AND have zero emergency fund, you additionally make the call in #1 to the mortgage company and vehicle loan as well. If they are willing to suspend your payment without penalty and interest and simply tack it onto the back end, do it. I do not say this lightly and this is extreme. But if you’re in danger of not eating next month, make these calls also.
A businesses 4 walls are likely office space, payroll, utilities, insurances and inventory. What will be a ‘wall’ will greatly depend on whether you’re continuing to operate, operating in a different manner or closing doors temporarily.
If you’re looking for some helpful tips, check out this blog by GoBankingRates on budgeting.
Get innovative and be creative for income streams. Places that are currently hiring in spite of Covid-19 include but are not limited to: Aldi, Amazon, Costco, Sam’s Club, Shipt, Uber Eats, Grub Hub, UPS, Walmart, Zoom, Whole Foods, Postmates, Microsoft and very likely your local grocery store (ours are!). Check your local listings for more local places to you and also some online opportunities.
Sell fixed assets that are shippable and possible for pickup depending on your area. This can be touchy based on the day and area of lockdowns, but you can still get the pictures taken, list it for sale and make the official sale once this is all over with and it’s safe to do so. You can list things for porch pickup only or of course, arrange a place to still meet and do so safely.
This is also a great time to start cleaning out your house! If you have enough, consider a yard sale when you feel the timing is appropriate to save you the travel and meeting back and forth. If you haven’t used the item in 6 months, consider letting it go.
If you’re a business owner, get out there and collect on all accounts receivable now. Offer discounts for paying quickly - you won’t get anything if those who owe you money close down or go bankrupt.
Continue to evaluate your strategic plan and needs as this goes on. It’s perfectly ok to feel one way today about continuing with your financial goals and deciding to pause them tomorrow. Or vice versa, to go into this ‘stork mode’ now and then to resume things next week because things and circumstances change.
Consider shopping local for all of the essentials you’re still buying or will be buying.
•Are you starting to think of Easter baskets or another upcoming holiday? Shop your local community for those who make things for kids.
•Are you still ordering vitamins from one of the big stores? What about ordering through your local chiropractor instead?
• Are you still buying hair supplies? Check out your local salon and see if they’re still shipping or selling products.
•Shop your local insurance agent and broker and leave your e-agent.
•Buy your takeout if it fits in your budget from a locally owned restaurant.
•Buy your clothes from a local boutique who’s still shipping or letting clients in.
•If you’ve already budgeted for the luxuries this month but couldn’t go, consider buying a gift card from your favorite place and using it in a few months. (Owners, be cautious of this all happening at once! I usually suggest a gift card account to drip out over time).
Be grateful for all the things you have and look for the positivity in all of this. I’m seeing and talking to families who haven’t spent this much time together playing games, laughing and making meals together. I am talking to business owners who are making changes and implementing automation that they’ve been trying to do for years. I am talking to business owners who are facing their fears getting visible online and creatively serving their clients and their clients are LOVING it! Be grateful if you can easily pay your bills, your utilities and remain in a safe spot during this scary and confusing time. Be grateful for all of the amazing doctors, nurses, warehouse workers, grocery clerks and stockers and to all of those who are continuing to serve you so you can stay safe. There’s so much to look around and be grateful for….a dose of gratitude each day will keep the bad news bears away :)
Kristen specializes in working with small business owners in both their businesses and their personal lives to maximize their financial capabilities. Keep reading the blog for other helpful hints, follow us on social media or sign up for our newsletter for ongoing tips and tricks for managing your finances.