With the pandemic causing business closures and economic hardship, many are facing unemployment and added financial strain. Reworking budgets, cutting back, and taking advantage of loan deferment programs are important steps many have started to take as they try to figure out what their financial future looks like. Now is a critical time to reevaluate your options, make adjustments, and assess your financial plan—and we have ideas to help.

1. Evaluate your spending: Before you make any big moves, it’s critical to know where your money is going. Determine what you’re spending on fixed expenses—like car payments, utilities, and your mortgage or rent—and then add up what you’re spending on discretionary expenses, like monthly subscriptions you don’t need, non-essential clothes, etc. Once you’ve written your expenses out, you can identify the easiest spots to reduce spending in the coming weeks and months, and you can potentially use that money to pay for fixed expenses or build up your emergency savings funds.

2. Negotiate your bills and loans: If you’re having trouble making your loan payments, work with your mortgage and car lenders to explain your situation and identify any loan deferment or payment programs available. Many companies, including credit card providers and banks, are offering helpful solutions during these trying times. It may also be worth reaching out to your monthly service providers, like your phone and internet providers, to see if they will consider lowering your monthly payment for you. Every bit helps! It’s important to remember that missing payments can negatively impact your credit score going forward.

3. Look at your tax withholdings: If you’re still working, or even working reduced hours, you may want to check and see how much you’re currently withholding from your income. Now may be a good time to reduce those withholdings. If you’ve lost your job and you’re filing for unemployment, you could consider reducing your withholding to zero. Just know this means you may owe more money when your 2020 taxes roll around, but you’ll have more money in your pocket now.

4. Be honest with your kids: As things change—like cancelled summer vacation plans or fewer meals out—it could be time to sit down with your children for a conversation about what your family is going through. Kids are curious and perceptive, and it can be helpful when you share the reasons why these changes are happening. To get them more involved and engaged, try asking them for their ideas on how your family as a whole can save a little extra money in the months ahead. If you need more tips on talking to your kids about money, check out this article.

5. Consider tapping into that rainy day fund: Have you been building up an emergency fund or have savings set aside for unexpected home expenses? Now may be the time when it’s necessary to tap into those funds to cover life’s essentials, like utilities and food.

6. Prioritize your extra savings: Planning ahead for your children’s education and/or your retirement is a wise financial move. However, if your emergency savings fund is running low and you need extra cash to cover your immediate, fixed expenses, your priorities may change. Although it should be a last resort, it might be time to consider modifying contributions to your 401(k) and/or college savings accounts. But remember—it doesn’t need to be a permanent change. You can always ramp your contributions back up when you’re feeling more financially stable.

As we all hope for the best, we have to handle and prepare for the unknown. These budgeting and savings tactics could help you stay afloat today—so you’re ready to weather whatever tomorrow may bring. If you’re ever in need of additional financial guidance or you have questions about options available to you, we’re here for you 24/7 at 800-860-8821.