2020 Financial Scares (And Their Cures)

COVID-19 made your finances sick. We can help you get them on the mend.

A recent report from TransUnion revealed that 52 percent of Americans have been financially affected by the COVID-19 pandemic. It’s been incredibly frightening watching markets drop, unemployment rates go up, and families struggle with their money. If you’re falling behind on payments, you aren’t the only one.

The CARES Act bought you some time, but this year is flying by. TransUnion reported that impacted consumers will not be able to pay their loans or bills in approximately 6.1 weeks. Those 6 weeks will go fast, so we want to help get your money problems cured as soon as possible. In this article, we’ll review three common money scares and their cures.

Scare: Losing your job.

Cure: Talk to your creditors and tap into emergency savings.

The pandemic’s economic impact caused a sharp increase in unemployment. Many also had their hours reduced, cutting their income below what they budgeted for. Either way, a lower household income can be a scary thing.

Creditors have fortunately been understanding of many customers’ situations. If you’re having trouble paying your bills, call up the lender or creditor and explain how the pandemic affected your ability to pay. They may be able to make your payments more manageable.

An emergency savings account can also help. If you have one, now is the time to use it. Budget it like it’s your income so you don’t spend it all at once.

If you still have a job, you’re lucky — millions of people lost their jobs because of the economic consequences of COVID. Use your income to start building a bigger emergency savings account just in case something happens.

What if I don’t have an emergency savings account?

Though it may be tempting, we strongly recommend against payday loans or other short-term, high-interest borrowing. Instead, you could:

  • Ask family or friends for help.
  • Use a low-interest credit card.
  • Get a quote for a personal loan (if you have a good credit score).

Read what financial experts have to say about handling debt after loss of income »

Scare: Not being able to pay your rent or mortgage.

Cure: Talking to a HUD-certified housing counselor.

Because of lower incomes and tighter budgets, many are also having trouble paying for shelter. The foreclosure and eviction ban from the CARES Act has been extended until December 31, so you can’t be kicked out yet. However, once January comes, you will be very behind if you haven’t kept up with your payments.

If you have enough money, keep paying as much of your rent or mortgage as you can. If you’re having a lot of trouble, call one of our HUD-certified housing counselors to discuss your options.

Scare: Piling on more credit card debt.

Cure: Calling Consolidated Credit.

You’re not alone if the debt you’re taking on right now is frightening. Millions of people are struggling financially because of the pandemic, and there’s no reason to be ashamed.

A certified counselor at Consolidated Credit can help you remedy your debt problems. When you call, they will give you a free debt and budget evaluation and assist you in picking the best debt relief solution for your situation.

It may be a scary year for your finances, but Consolidated Credit isn’t afraid of debt.

Written by :
April Lewis-Parks [email protected] Director of Education and Corporate Communications

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April Lewis-Parks
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