The coronavirus pandemic has supercharged the financial stress that already plagues many Americans, an expert says.
About half of Americans lived paycheck to paycheck before the pandemic, according to a recent survey from First National Bank of Omaha, and now many have lost their jobs.
Here is some 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, prioritize what bills need to be paid, eliminate nonessential 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 nonessential 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.
Managing Financial Stress
More than three-quarters of Americans say money is a significant cause of stress for them, says the American Psychological Association.
To help manage financial stress, the association encourages people to:
- Remain calm and stay focused.
- Identify financial stressors and make a plan.
- Recognize how you currently deal with stress related to money.
- Turn challenging times into opportunities for growth and change.
- Ask for professional support from financial planners and psychologists.