The pandemic had a dramatic impact on the financial market that resulted in a financial crisis not seen since the Great Depression. This resulted in a lot of job losses due to the closure of many businesses around the country. Even as the pandemic may be nearing its end with the release of Covid-19 vaccines, some people are still struggling with the financial stress caused by the health crisis.
While the mental anguish a person feels due to financial issues seem insurmountable, they can deal with it if they focus on the task at hand.
Clear Your Head
The first thing a person must do to cope with the stress caused by pandemic-related financial stress is to clear one’s head. It’s not easy to focus on the critical things to do if the person continues to mope over the current situation.
It’s essential to keep one’s mind off the situation for the moment. They can take a deep breath and meditate. They can also take a walk around the neighborhood to take their mind off the situation. Another option is to work on a garden jigsaw puzzle or an adult coloring book. These may appear to be childish games, but they can provide the stress relief a person needs in these types of situations.
Take an Inventory and Set a Budget
While it may be too late already, but it’s still essential for a person to take an inventory of all available assets and liabilities. This means checking all their bank accounts and see if they are still liquid. Aside from the assets, people should also check all the bills that have remained unpaid. This will allow a person to see if the available assets can cover these bills.
Additionally, people should also start working on a budget while taking into account the assets and liabilities they have. Having a budget allows people to take control of their finances. It also helps them work on a strategy in dealing with any unpaid liabilities that they have.
Working on the budget means taking note of the income and subtracting the expenses. If the resulting figure is zero, it does not automatically mean they have no money. It simply shows that the income fully covers everything they need. It also demonstrates that all the funds were used for a purpose, which was to cover an expense. People should also make a new budget each month to see if there are any changes in their spending, especially if the income stays the same.
But if the figure is negative, then it’s time to go to the next step, which is to negotiate with creditors.
Negotiate Whenever Possible
If the budget does not allow any reduction in expenses and income doesn’t cover all the liabilities, people can negotiate with their creditor or bank so that they can pay off any liabilities they have. Some credit card companies offer flexible payment schemes. They can also waive interest and late fees due to the pandemic.
Mortgage forbearance programs are also available for borrowers that can suspend or lower monthly payments. They can also check if they qualify for coronavirus hardship loans to allow them to pay off some of their monthly expenses and redirect some funds to other liabilities. The important thing here is that people should find different ways to cover their liabilities without having to file for bankruptcy.
Get a Pro Bono Financial Adviser
At this point, people who are dealing with financial issues can look for a pro bono financial adviser. Some organizations provide financial planning services to people who need them for free. The financial adviser can provide valuable insight into the situation and help people find solutions to their problems. They can also help them organize their finances and create a plan to manage their debt.
Additionally, it is also vital to increase their financial literacy to have an idea of what to do in the future and avoid something like this from happening again. There are several low-cost and even free literacy programs that help people increase their knowledge about managing their finances.
Start Planning
Even as many people continue to deal with financial difficulties during the pandemic, the situation will improve soon. It may start with the release of the stimulus checks from the American Rescue Plan Act. The checks will go a long way to help improve their current situation.
While waiting for the checks, people should start planning already based on what they learned from the experience when the pandemic started. They should not only create a budget, but they should also set up an emergency fund that they can use in the future.
Dealing with financial stress due to the pandemic is not easy. But it isn’t impossible if people know what they should do to deal with it.