While the coronavirus (COVID-19) is considered an unpredictable virus, recent developments have proven its ability to spread quickly and become a global issue. According to the Centers for Disease Control and Prevention (CDC), “More cases of COVID-19 are likely to be identified in the coming days, including more cases in the United States.”
The CDC warns that as the virus progresses, large numbers of people needing treatment may inundate the healthcare system. Workplaces and childcare centers may suffer from worker absenteeism due to infection or worry over the infection. Public transportation, emergency medical services, and law enforcement may also be negatively affected. Additionally, the coronavirus has negatively impacted the global economy.
With so many global and local impacts, it’s important to ensure you’re prepared for how this virus outbreak may affect your personal financial situation. You may need to stay home from work or take unpaid sick leave due to the severity of the outbreak. It’s crucial to take the necessary steps to protect your finances and prepare for this situation. By reacting appropriately and quickly, you can minimize negative effects.
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Gather All Important Documentation
If the coronavirus directly threatens your place of employment or your health, you may need to take time off work. You may also find yourself isolated at home to avoid contact with other people in public places. It’s important to prepare for this situation by gathering documentation you may need.
Specific documentation you may need is unique to your situation and employment, but may include the following:
- Financial documents: Your financial documents are important so you know your current situation. By keeping an eye on these documents, you can ensure you maintain stability and don’t head toward a financial emergency.
- Sick leave documentation: If you’re taking time off from work, you’ll need to understand your employer’s sick leave policy. Gather documentation, such as your employee handbook, that outlines the policy so you know you’re following the guidelines correctly.
- Remote work documents: If your employer allows, you may be able to work remotely to avoid contact with coworkers and the potential spread of the coronavirus. Gather any passwords or documents you’ll need in order to complete your job duties efficiently at home.
- Medical information: You may be required to provide proof that you sought medical treatment if you miss work. Request this documentation from your doctor and be prepared to provide it to your employer when you go back to work.
You should also keep your identification documents gathered together in a safe place. If you need to leave unexpectedly, you can easily access these documents and bring them with you. These may include your Social Security card, passport, and driver’s license or identification card.
Evaluate the Situation
The seriousness of the coronavirus is enough to cause concern. If you miss work, you may also feel stressed about living on a tight budget. Before you begin to let your feelings get the better of you, take a moment to evaluate the situation. Consider how long your employee absence may be and develop a financial strategy to get through it.
Look into the current facts on the virus and arrange your work and financial plans accordingly. Ask yourself the following questions about your personal situation:
- How long do I think I’ll be out of work?
- How much income may I lose within this time period?
- Do I have other options to earn income, such as working from home?
- How can I change my current budget to make up for this loss of income?
- Do I need to use my emergency fund to pay for necessities?
When you stay positive about the situation, it’s easier to make changes to your current routine so you can adapt to real-time developments related to the virus. Evaluating your financial situation also helps minimize the long-term financial effects this emergency may have on your situation.
Prioritize Expenses
If you find yourself out of work due to the coronavirus, it could negatively affect your budget and finances. Ensure your money lasts as long as it can before you go back to work by prioritizing expenses.
To generate a realistic budget, list all your monthly expenses. Prioritize them by importance and identify the frivolous expenses you can avoid, such as going out to eat or getting your nails done.
Pay your priority expense first and if you have room in your budget, consider indulging in other monthly expenses you usually incur. By sticking with a budget and knowing where your money is going, you’ll feel more confident about your financial situation, even if you have to take time off from work.
Cut Your Spending
If you’re facing time off from work that will negatively affect your finances, analyze your budget and see where you can cut spending. Monthly bills, such as streaming services or subscription boxes, may need to be immediately cut from the budget for a period of time. When you cut unnecessary expenses from your budget, your money will last longer and you can pay important bills each month until the emergency is resolved.
Negotiate With Lenders
If you’re facing significant time off from work, you may find it hard to continue paying your mortgage, car loan, or credit card bill. Your lender may be open to negotiating terms with you so you aren’t financially impacted long term due to your time off from work.
Contact your lender as soon as possible to negotiate your loan’s interest rate, balance, or monthly payment. More favorable loan terms may be just what you need to remain financially stable during this emergency.
Make or Find Extra Money
If you don’t have enough cash saved in your emergency fund and you’re facing time off from work, you may need an additional source of income to make it through. There are several alternate ways to generate income that may help you in this tight financial situation, such as:
- Asking your employer if you can work remotely.
- Taking out a personal loan.
- Borrowing money from friends or family.
If you have retirement savings accounts, such as a 401(k) or 403(b), you may also qualify for a hardship withdrawal for quick cash. However, when you withdraw from retirement accounts, you are responsible for paying taxes and other early withdrawal penalties. These expensive fees and taxes may throw you off course with your retirement plans.
Look for Available Assistance
If you’ve completely lost your job or your income has depleted dramatically, there may be government assistance programs available to assist you. If you meet the qualifications, you may receive unemployment benefits or Consolidated Omnibus Budget Reconciliation Act (COBRA) health insurance through your previous employer.
Plan for the Next Financial Emergency
Once you’ve made it through the coronavirus hardship, begin planning for the next potential financial emergency. Learn from your mistakes and consider the areas where you felt underprepared. Address these concerns with a plan of action that encompasses how you’ll deal with taking time off from work in the future.
If you used your emergency fund or retirement accounts through this crisis, make building these resources back up your top priority. While the coronavirus may lead to financial instability, if you remain calm, stay on budget, and prepare for this emergency, you can survive the crisis relatively unscathed.
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