If you’ve been laid off, furloughed till further notice or had your hours cut, rework your budget ASAP. It’s not fun. But it can help you regain some control in a situation that can feel pretty helpless.
Where do I start?
See what your old company is offering. Find out if you’re getting severance (a financial parting gift). And how long you have access to health insurance coverage. Speaking of health insurance, if your company had more than 19 employees, you may qualify for COBRA.
Remind me how COBRA works.
It extends your employer-sponsored healthcare coverage. Your employer or health insurance provider will let you know if you qualify. And send all the details. Like what’s included in your coverage, when your coverage will start, and any premiums that you need to pay. Then you have 60 days to elect coverage or waive it. If you waive it, you may be able to change your mind within the 60-day window.
Once you say ‘yes, please,’ you’ll be covered for 18 months. Maybe longer if you meet other criteria, such as having a disability. Just know: you’ll be on the hook for the entire premium (instead of splitting it with an employer) plus admin fees.
How would I pay for that...and everything else I need?
Your next move is to add up every bit of income you can get. Thanks to the COVID-19 pandemic, the government’s expanded unemployment benefits so more people qualify. (Hi, freelance and part-time workers.) And weekly payments will be $600 bigger for the next four months. Check your state’s labor website for more info.
What about those stimulus checks everyone is talking about?
If you made less than $99,000 in 2018 (or 2019 if you’ve already filed your tax return this year), you could get up to $1,200 from the federal gov. Plus an extra $500 for each kid under 17. See how much you should expect here. Pro tip: set up direct deposit to get your money faster. The IRS launched a new tool to help.
I’m not sure that will cover all my regular payments.
Lenders are getting more flexible as we navigate this new world. Uncle Sam has pressed pause on federal student loan payments (including interest) for a few months.
If you have other debt – like private student loans, credit card bills, a mortgage, auto or other personal loans – that’s weighing heavy, contact your lender. If it’s a rent, utility or Internet bill that’s stressing you out, see if your local gov has set up any special rules or relief programs. Or if your provider will cut you some slack. Unlike employer benefits and stimulus checks, you have to be proactive. Ask directly, be honest about what you can realistically afford, and negotiate as best you can.
Related: How to Be a Better Negotiator
Anything else I can do?
Eliminate some expenses. New clothes, expensive exercise classes – anything that isn’t a high priority right now. Psst...a lot of companies are offering free virtual workouts. Take advantage.
Find places to downgrade. Think: your fav streaming service, but with commercials instead of the more expensive, ad-free package.
Shut off auto-pay. Looking at your monthly statements more closely can help you get more intentional with your spending. Consider using a budget tracking app or DIY spreadsheet, too.
Avoid withdrawing from your retirement accounts. If you can help it. As always, this should be a "last resort" move. That said, it’s okay to hold off on adding to your savings or investment accounts. Focus on making your budget work for now and get back on track with your other goals when you can.
Know where NOT to cut. That's healthcare, insurance premiums, and minimum debt payments. Anything that will cause you more pain to fix later.
Losing your income in the middle of a pandemic is like a sucker punch. Doing research and taking action to adjust your budget won’t take away that pain or stress. But knowing where you stand financially and making a plan can help you stretch your money.
Subscribe to Skimm Money
Your source for the biggest financial headlines and trends, and how they affect your wallet.