OMAHA – Money matters continue to be the leading cause of stress in America, and the COVID-19 pandemic is only adding to the financial stress on families. Record high unemployment, food insecurity, supply scarcity and feelings of uncertainty connected to household finances are on the rise, according to Julie Kalkowski, executive director of the Financial Hope Collaborative at Creighton University.
Even before the pandemic sent unemployment rates up across the country, 49% of Americans lived paycheck to paycheck, according to a recent survey from First National Bank of Omaha.
“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 Kalkowski. “Knowing that you are not in this alone is important to keep in mind as you move forward.”
It’s normal to feel a range of emotions, including anxiety, when dealing with changing finances due to the pandemic. Even those whose employment hasn’t changed may feel fearful, thinking,”What if my job is next?”
Kalkowski recommends the following steps to help individuals reduce financial anxiety, both during and after the COVID-19 pandemic:
Don’t panic.
Individuals can find comfort in knowing they are not in this pandemic alone. Avoid using credit cards and payday loans to alleviate debt ─ the high interest rates can have long-lasting negative impacts. Instead, it’s important to be resourceful and resilient, seeking out creative solutions, such as contacting landlords, utilities and creditors to negotiate payment plans. Ignoring bills can make a bad financial situation worse.
Don’t get scammed.
Kalkowski warns individuals to beware of scams, as they seem to be proliferating right now. Thoroughly verify offers by placing additional calls and/or seeking out additional information from trusted sources online. If an offer seems too good to be true, it likely is. To steer clear of identity theft, avoid sharing personal information through text or email.
Focus on what can be controlled.
A spending plan/budget is the foundation of all financial planning, and monthly cash flow management is critical. Evaluate 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. Having a plan will reduce anxiety.
Make a plan.
Set realistic financial goals and determine what can be done differently over the coming months, focusing on needs versus wants. While savings are a luxury for most families, setting aside as much money as possible into an emergency savings fund is a great use of federal stimulus money, Kalkowski says. After the pandemic, Kalkowski recommends routinely adding to savings when you can and reducing nonessential spending. Consolidate cable plans and make meals at home instead of purchasing fast food. Also, seek out bargains and compare prices when shopping to get the best deals possible, but only for needs, not wants. Staying purposeful with spending can help individuals avoid spending more than anticipated.
Locate resources.
Nebraskans who were laid off or furloughed can file for unemployment benefits through neworks.nebraska.gov; Local nonprofits like the United Way also may be able to help. For more information on available assistance in Nebraska and Iowa, call 211 or visit 211.org.