{"id":358364,"date":"2020-04-17T09:29:24","date_gmt":"2020-04-17T15:29:24","guid":{"rendered":"https:\/\/www.creditrepair.com\/blog\/?p=358364"},"modified":"2022-01-20T18:33:36","modified_gmt":"2022-01-21T01:33:36","slug":"how-to-better-protect-yourself-financially-during-covid-19","status":"publish","type":"post","link":"https:\/\/www.creditrepair.com\/blog\/finance\/how-to-better-protect-yourself-financially-during-covid-19\/","title":{"rendered":"How to Better Protect Yourself Financially During COVID-19"},"content":{"rendered":"\n
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Though many of us have dealt with financial hardships before, the challenges presented by the ever-evolving coronavirus (COVID-19) pandemic are unprecedented and alarming. The CDC has provided guidelines<\/a> you can follow to help protect your physical health and that of your loved ones, but you may be wondering how you can protect your financial health as well. <\/p>\n\n\n\n

If you\u2019ve found yourself worried about how to make payments and how to recover from financial setbacks, you\u2019re not alone. Here\u2019s a thorough guide to guarding your finances while you\u2019re guarding your health.  <\/p>\n\n\n\n

The Financial Impact of Coronavirus (COVID-19)<\/h2>\n\n\n\n

In terms of the economy, nowhere is the effect of the pandemic more visible than in unemployment rates.  Recent statistics show that nearly 10 million people<\/a> applied for unemployment insurance within the past two weeks, with the previous record being 695,000 filings in 1983. And though the numbers are imprecise, the New York Times <\/em>estimates that the current unemployment rate is somewhere around 13%<\/a>, the highest it\u2019s been since the Great Depression\u2014and numbers are only expected to rise. <\/p>\n\n\n\n

However, some experts maintain that there\u2019s reason to be optimistic<\/a>. This is because consumers can more or less resume their normal participation in the economy once restrictions are lifted, as opposed to during the 2008 recession. In addition, the government\u2019s $2 trillion stimulus package<\/a> should help the economy bounce back faster. <\/p>\n\n\n\n

Be realistic and\nmanage your expectations, but don\u2019t let the bleak numbers stop you from being\nhopeful.<\/strong> <\/p>\n\n\n\n

Remember that the economy will improve in the future. And\nmore importantly, learn what steps you can take now to mitigate your financial\nrisk so you are protected going forward.<\/p>\n\n\n\n

Build an Emergency Fund<\/h2>\n\n\n\n

One of the first things you can do is start contributing to\nan emergency fund if you don\u2019t already have one, or you can adjust how much you\ncontribute to an existing emergency fund. This will help you rest a little\neasier at night, knowing you have a cushion of money in case you need it in the\ncoming months.  <\/p>\n\n\n\n

How to Build an Emergency Fund<\/h3>\n\n\n\n

Though you have many different options when it comes to emergency funds\u2014some economists suggest saving up to a years\u2019 worth<\/a> of money, while others say that $2,467<\/a> is a good minimum to have\u2014an easy method to modify for your use is the 50-30-20 budget. This means that you dedicate 50% of your after-tax income to needs, 30% to wants and 20% to savings and paying off debts. <\/p>\n\n\n\n

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But these days, you may be able to reallocate some money to your savings and debts. \u201cIt’s that 30% that’s changing right now,\u201d says<\/a> finance writer Kimberly Palmer. \u201cAnd so where we used to have that restaurant spending, personal care spending, getting haircuts and activities for my kids, that’s what we can now transfer into savings.\u201d <\/p>\n\n\n\n

Take a look at your budget and see if this strategy can work for you.<\/p>\n\n\n\n

How to Use Your Emergency Fund During a Crisis<\/h3>\n\n\n\n

When a crisis situation comes up, first see if you can avoid\ndipping into your emergency fund by reducing your spending or supplementing\nyour income in a new way. Once you determine that you\u2019ve done what you can, let\nyourself use your emergency money guilt-free\u2014you saved it for this! <\/p>\n\n\n\n

You\u2019ll need to decide what bills you can cover with your\nfund and whether you can save any money in case of a worse emergency in the\nnear future. (During the coronavirus pandemic, for example, you may want to try\nto save some money for medical expenses\u2014just in case.)<\/p>\n\n\n\n

Prioritize Your Bills<\/h2>\n\n\n\n

It can be tough to decide which bills to pay first, but it\u2019s\nworth doing in order to protect your well-being and your credit. Here are some\ngeneral tips for prioritizing your bills:<\/p>\n\n\n\n