Coping with budget stress during the pandemic

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The coronavirus pandemic has supercharged the financial stress that already plagues many Americans, an expert says.

About half of Americans lived pay check to pay check before the pandemic, according to a recent survey from First National Bank of Omaha, and now many have lost their jobs.

"The pervasive financial stress the majority of Americans feel is now on steroids, as most Americans did not have savings before this crisis hit," said Julie Kalkowski, executive director of the Financial Hope Collaborative at Creighton University in Omaha, Nebraska.

"Knowing that you are not in this alone is important to keep in mind as you move forward," she added.

Don't panic

Kalkowski manages a School of Business programme that educates people about the psychology of money, tracking expenses, saving for emergencies and repairing credit.

She offered this advice on how to reduce financial anxiety both during and after the coronavirus pandemic:

  • Don't panic. Don't use credit cards or payday loans to deal with your debt. Their high interest rates can do long-term financial harm. Instead, seek out creative solutions such as contacting landlords, utilities and creditors to negotiate payment plans. And, don't ignore bills. Doing so can make a bad financial situation worse.
  • Beware of swindlers. Scams are proliferating right now. Thoroughly vet any offers by making additional calls and/or seeking out more information from trusted sources online. If an offer seems too good to be true, it likely is. To protect yourself from identity theft, avoid sharing personal information through text or email.
  • Focus on what you can control. Make a spending plan. Assess how much money is coming in each month, prioritise what bills need to be paid, eliminate non-essential spending and track expenses by keeping receipts. Adjust expenses accordingly each month, focusing on mortgage or rent, utilities, groceries and items needed to shelter in place.
  • Save more, spend less. After the pandemic, add to your savings and reduce non-essential spending. For example, consolidate cable plans and make meals at home instead of eating in restaurants or ordering in. Compare prices when shopping to get the best deals possible, but shop only for needs, not wants.

READ | Coronavirus news on social media stressing you out? Here's how to handle the anxiety

READ | Looking after your mental health during the coronavirus crisis

READ | Can you dodge depression during the coronavirus pandemic?

Image credit: iStock
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