Originally published here at The Dr. Oz Show by Melanie Haid and Toni Gasparis.
The outbreak of COVID-19 has flipped the world upside down. With the economy coming to an abrupt halt, businesses closing, and people losing their jobs, it’s a scary and uncertain time. If you or someone you know was laid off or furloughed, what should you do now that you’re unemployed due to COVID-19?
An article published in February 2020 on Forbes reported 49% of Americans would be living paycheck to paycheck this year and 53% surveyed said they didn’t have an emergency fund (meaning at least three months of expenses saved). These stats were reported before the pandemic hit hard, resulting in a huge, sudden spike in unemployment nationwide; as of Apr. 23, 2020, 26 million Americans are jobless. Having an income and the ability to pay for necessities is critical, especially now, but as non-essential businesses remain closed and people continue to lose their jobs, it can be hard to financially support yourself and your family. Financial expert Suze Orman called in to The Dr. Oz Show on Apr. 20, 2020 to help guide those who’ve been financially impacted by COVID-19 learn how to navigate unemployment and pay bills in this tumultuous time.
Benefits from Unemployment & How to Apply
If you’ve been laid off or lost work as a result of COVID-19, the good news is that even if you’re normally ineligible (freelancers, self-employed, part-time employees, etc.) to collect unemployment, the Coronavirus Aid, Relief, and Economic Security (CARES) Act now gives states the option to extend unemployment compensation to a wider variety of workers.
If you are unemployed, you’ll want to file a claim with the unemployment insurance program in the state you worked in as soon as you are able. How much money you recieve is dependent upon the state you file in, however, the $2 trillion stimulus bill that passed in March 2020 expanded the unemployment benefits to include an extra $600 a week to all states benefits through July. If you are partially employed, were furloughed, or are an independent contractor and wonder how these benefits and the CARES Act apply to you, there is a helpful list of FAQs on the U.S Department of Labor’s website.
Once you have successfully registered and are approved for unemployment, make sure to create a list to keep track of your money in this new financial situation. Orman recommends making a “big money” list that includes all the money coming to you and all the money you may have access to in order to better understand and track your finances (this includes unemployment checks). Once you can see all your money written down in front of you, you will be able to more accurately budget and understand where you need to cut costs.
Find Out Which Companies Are Forgiving Late Payments
During the pandemic, you may find yourself unable to pay critical bills because you are financially or physically (if you get sick) unable to do so. Companies and many financial institutions recognize this and are willing to work with you during this difficult time. Start by listing out every bill you pay monthly or annually and then take some time to research how the companies you pay might be able to assist you.
If you have student loans to pay, the CARES Act suspended federal student loans until September 30, 2020. “Many places are willing to work with you right now and negotiate your payments,” says Orman. Even some utility companies have sent customers notices saying they won’t shut off your power if you miss payments during this time. Additionally other essential monthly payments like rent and mortgages are being put on hold.
For other monthly bills like phone/internet plans, insurance, and auto loans, Orman suggests calling these companies to figure out your options and negotiate. “Everyone should make calls [to] determine if [certain bills] are still necessary to pay or if [companies] are willing to put you on forbearance,” says Orman. Even though you may still be accruing interest from some companies, forbearance will allow you to take a break from paying specific bills.
Depending on the company, interest may not be a factor. Some credit card companies like The Apple Card, American Express, and Capital One are letting their customers skip payments without accruing interest. You won’t know your options until you reach out and call.
Cut Out Unnecessary Expenses
“Anything that’s not an absolute necessity should not be taking your money. That’s cable, your perfect phone plan, etc.” advises Orman. According to a 2018 survey, Americans spend an average of $238 a month on subscription-based services. This data did not include a phone plan, which for a family of four with unlimited data, often costs around $220 a month, depending on your phone company. If you haven’t done so already, make a list of non-essential or entertainment-based subscriptions you pay and figure out what to cut from the budget.
Avoid overbuying at the grocery store too. While food is essential, the pandemic panic has caused people to overstock and overbuy. Make a grocery list and stick to it to help cut down on your grocery bill.
Use Any & Every Resource Available
In addition to cutting budgets and not spending money on things you can’t afford during unprecedented financial hardship, Orman recommends taking more drastic measures if needed, like expanding your credit card limit or asking more financially-stable family members or friends for loans if needed.
You can also take out a loan through your bank, credit union, or online lenders. While these may not always be the best options and often carry interest rates, it might be necessary right now to help make ends meet.
Local financial resources to help you get food, pay for housing bills and other essential services, can be found on 211.org using your zip code. This program offers a wide range of support nationally, along with information on stimulus payments, health and medical expenses, accessing the internet, getting loans for small businesses, and more.
You may also want to consider contacting the National Consumer Law Center (NCLC) which can help you get the aid that you need more quickly. The NCLC can put you in contact with legal advocates to push policymakers for financial relief, answer questions regarding stimulus payments and financial aid during COVID-19, as well as providing specific links that tell you exactly where relief programs are being put into place. Their website includes recommendations as well as continually updated information on Congress and companies’ response to the virus and how it will impact you.
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