32 min
#037: Our New (Not) Normal Life is Life!
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- Society & Culture
As coronavirus aka COVID-19 spreads around the globe, many individuals, families, and businesses are struggling to figure out our new world in all the chaos.
Many of us are likely experiencing financial stress. What exactly is financial stress? It's the gap between the unknown and reality smacking us in the face.
While there are many uncertainties remaining, there are steps we can take to lessen the stress of the current unknowns.
Regardless of your current employment situation, review the following three scenarios for your family’s financial situation to determine your financial fuel. Financial fuel is the amount of money you have leftover after paying your expenses/spending.
Make a list of your expenses and consider the following impact to your budget based on the following changes to your pay.
No change in income30% pay cutFurlough/layoffs For example, if you and your partner took home $3,500 per month in income, but your expenses were also $3,500, this is what your pay changes may look like based on the three scenarios:
No Change in Income - $0 30% pay cut (-$6,300 loss after 6 months)Furlough/Layoffs (-$21,000 loss after 6 months)Keep in mind for every 1 bad month we have financially it takes about 3 months of financial recovery time.
If you have lost your job, are worried your position or industry is not stable, or if you do not have an emergency fund, there are steps you can take to fill the gap.
4 Ways to Fill Gap
Side Hustle/ Cut Expenses (Want to increase financial fuel by 10-20% if possible)Unemployment (varies by state)Government checks (dependent on income & government legislation)Steady App (App Store - shows by zip code various side hustles)Cash in rewards points (credit cards, bill credit, gift cards)Sell talent or stuffFiverrUpworkCut expenses: Review housing payments, student loan payments, retirement contributions, entertainment/eating out budgetAssess savings Emergency fund / SavingsCheckingSavingsVacation FundDown Payment FundBrokerage Account (Acorn, Charles Schwab, TDA)RetirementPrioritize Payments (buy yourself time)Make a list of:Required billsCall and ask about COVID-19 policy for every bill. Ask about fees/interestWhat programs are available? How long?Non-recourse defermentsRecourse defermentsAnything else (misc)Borrow Debt (lowest/safest)If you need to borrow, borrow from a safe lender firstPayment deferredHome equityCredit union loans401 k loansCredit cardAvoid:Payday loansPredatory lendingPawnshopsSupport the Show.
As coronavirus aka COVID-19 spreads around the globe, many individuals, families, and businesses are struggling to figure out our new world in all the chaos.
Many of us are likely experiencing financial stress. What exactly is financial stress? It's the gap between the unknown and reality smacking us in the face.
While there are many uncertainties remaining, there are steps we can take to lessen the stress of the current unknowns.
Regardless of your current employment situation, review the following three scenarios for your family’s financial situation to determine your financial fuel. Financial fuel is the amount of money you have leftover after paying your expenses/spending.
Make a list of your expenses and consider the following impact to your budget based on the following changes to your pay.
No change in income30% pay cutFurlough/layoffs For example, if you and your partner took home $3,500 per month in income, but your expenses were also $3,500, this is what your pay changes may look like based on the three scenarios:
No Change in Income - $0 30% pay cut (-$6,300 loss after 6 months)Furlough/Layoffs (-$21,000 loss after 6 months)Keep in mind for every 1 bad month we have financially it takes about 3 months of financial recovery time.
If you have lost your job, are worried your position or industry is not stable, or if you do not have an emergency fund, there are steps you can take to fill the gap.
4 Ways to Fill Gap
Side Hustle/ Cut Expenses (Want to increase financial fuel by 10-20% if possible)Unemployment (varies by state)Government checks (dependent on income & government legislation)Steady App (App Store - shows by zip code various side hustles)Cash in rewards points (credit cards, bill credit, gift cards)Sell talent or stuffFiverrUpworkCut expenses: Review housing payments, student loan payments, retirement contributions, entertainment/eating out budgetAssess savings Emergency fund / SavingsCheckingSavingsVacation FundDown Payment FundBrokerage Account (Acorn, Charles Schwab, TDA)RetirementPrioritize Payments (buy yourself time)Make a list of:Required billsCall and ask about COVID-19 policy for every bill. Ask about fees/interestWhat programs are available? How long?Non-recourse defermentsRecourse defermentsAnything else (misc)Borrow Debt (lowest/safest)If you need to borrow, borrow from a safe lender firstPayment deferredHome equityCredit union loans401 k loansCredit cardAvoid:Payday loansPredatory lendingPawnshopsSupport the Show.
32 min