Don’t count on a second round of stimulus checks: what to do instead

With the economy officially in recession, millions of Americans continue to receive unemployment benefits and some states pause their reopening plans amid spikes in the number of coronavirus cases, not surprising that some lawmakers are calling for a second round of controls on stimulus.

While Democrats have primarily been pushing the idea (the stalled HEROES requires asking to distribute up to a maximum of $ 6,000 per household), President Trump recently voiced support for another round of funding. “We will make another stimulus package. It will be very good. It will be very generous,” Trump said in an interview last week.

However, even if a second round of stimulus checks is approved, it will likely not pass until the end of July. Also, for some Americans, the amount will not cover all of their expenses if they are unemployed.

Rather than having a second round of encouragement to make your budget work, here are five steps you can take now to help you pay your bills and get firmer financial ground, according to money experts.

1. Determine what you can live without

If money is tight right now, start by determining what expenses you can cut, at least temporarily.

In recent months, many Americans have involuntarily spent less because they have been unable to dine or shop normally. Those changes can make it easier to analyze what is essential and what is not essential – take a look at what you bought in March and April because that is when you were most likely to have spent only on the essentials. From there, breakdown which purchases were critical and which were the least, says Alexandria Cole-Davis, a Maryland-based Facet Wealth financial planner.

Another way to think about it is to create a “noodle budget,” which is the lowest budget you can get away with, says Tiffany Aliche, a personal finance expert and founder of The Budgetnista. To figure this out, imagine you have to eat only Ramen noodles and pay for the most basic basics like rent and utilities, Aliche says. What is the lowest possible amount you can spend to live each month? That number is your noodle budget.

For those who don’t need to cut dramatically, consider what you spend on food, food and entertainment, as well as recurring expenses like gym memberships, streaming services, and monthly subscriptions for food, clothing and beauty products, says Evelyn Zohlen. , a certified financial planner and founder of California-based Inspired Financial.

Once you have a good estimate of your expenses, decide what is essential and what you can live without until you recover your financial situation.

2. Optimize how you spend money

It is probably a good time to look at your bills and determine if you are spending too much on something. Most people set up services like cable or Internet when they move and then years go by without analyzing bills. But it does not hurt to register and see if there are lower priced options.

Personal finance coach Ramit Sethi says there are five types of bills that you probably pay regularly that you should try to cut: cell phone, cable, credit card, student loan, and home. Many of these companies, as well as your utility and auto insurance provider, may have formal financial assistance programs available at this time. But even if they don’t, these providers are worth calling to try to negotiate your current payment or delay payment until a later date.

Find out what assistance may be available to you and if there is any information or documentation that you need to gather in advance. Also, take a look at your payment history – if you’ve had payments on time for years, it’s worth mentioning when you call these companies.

You should also look at the alternatives available to you. Are there better cable packages for new customers? Or credit cards with lower introductory APR rates or 0% APR periods? If you currently have an unlimited plan with Verizon or AT&T, for example, consider switching to a budget provider like Visible or Cricket if your phone is paid. Both companies, which operate on the Verizon and AT&T networks, offer plans that could save you up to half of your current cell phone bill.

And take the time to review your home, car, and / or tenant insurance. It may not be a fun task, but it might give you an opportunity to “squeeze a little more money out of the budget,” says Zohlen.

While it is important to make sure that your coverage and liability limits are appropriate for your current situation, it is also good to critically analyze your deductible. If you have expensive homeowners insurance with a low deductible, ask yourself how often you file a claim on the policy. Probably not as often, Zohlen says. It might make sense to make some changes.

3. Prioritize your invoices

Once you’ve cut your expenses and cut your bills as much as you can, prioritize where your money is going, Aliche says. To determine which bills and expenses you should pay first and which ones you can delay, Aliche recommends asking yourself two questions: If I don’t make this payment, won’t I be healthy? If I don’t make this payment, will I be insecure?

If the answer is yes to any of them, pay that bill the best you can. And again, if you have not already done so, examine the numerous assistance and deferred payment programs that can be offered by utility companies, cell phone providers, lenders, and homeowners.

“Lean on that help,” says Aliche. There is no point in putting all your savings or your unemployment check on your mortgage if you have a federally backed loan where you can defer payment for six months without accruing fees or interest.

4. Find ways to earn more

It may seem strange with so many currently unemployed Americans, but there are still creative (and direct) ways to make money right now, even if you’ve been fired due to the pandemic, Sethi says.

For some, it may be starting an online business, or perhaps working in an industry that has not been so affected by coronavirus closings. It is also worth noting that there are currently several strong federal and state programs in place to help Americans recover financially.

But you don’t have to be an entrepreneur to earn some extra money. Many shipping providers, grocery stores, food delivery apps, and even retailers are hiring right now. Part-time work could help you bridge the financial gap as you look for a new job in your field or a related industry.

There are even some types of full-time remote jobs, such as recruiters, sales account executives, customer service representatives, and computer support specialists, who are experiencing an increase in job openings, according to online job site ZipRecruiter.

5. Save any extra money

As expected, experts recommend saving what you can. All the money that you have managed to cut from your budget must go to pay essential bills or savings. “Now, more than ever, having emergency savings is critical,” says Aliche.

Ideally, you should have six months of living expenses saved. While that may sound like a large number, you can start small and gradually build a savings mattress to help you cope with the unexpected costs of living.

Make it as easy as possible: Set up a regular, automatic transfer from your checking account to a savings account, preferably a high-yield option that will pay you a slightly better interest rate than your typical savings account.

“If you have a little excess cash, you still want to keep in mind that you’re using it as savings because we don’t know what will happen next,” says Cole-Davis.

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