5 Ways to Minimize Accruing Debt During the Pandemic
The global pandemic has taken a financial toll on us all. This is especially true for small business owners or those who are temporarily out of work and going into debt. Unfortunately, even with the decrease in income, our bills still need to be paid.
This situation will make it very easy for millions of people to end up in debt, even those who have always managed their finances well in the past. That’s why it’s important for everyone to find new ways to remain financially stable. The current circumstances are very new and different for everyone. We have never experienced an event quite like this in the past and therefore no one is immune to the stress of potential financial struggles.
5 Ways to Effectively Minimize Debt During a Global Pandemic
If you are already facing money troubles during the coronavirus pandemic, or if you feel you may have problems in the near future, here are a few useful tips that can assist with minimizing debt.
Reduce Your Spending
It’s important to step back and take a look at what you need and what you can truly live without during this time. Especially if your finances are unpredictable. While we still need food, electricity and a place to live, you may not need all these extras such as every popular streaming service on TV for example, or other luxuries. Also, because so many of us are spending more time online, there’s been a surge in online shopping. Trying to limit your online buying and staying mindful of your budget will help you prevent accrued debt in the near future.
Prioritize Your Bills
Take a close look at your current bills and determine which are the most critical. Make it a habit to pay these bills first. While it’s never good to put off bills and endure late fees in times like these, we sometimes have to make difficult choices. If you need to buy groceries or pay your rent before a credit card payment that can wait, then that is your best option.
Look for Different Payment Options for Loans
Special provisions have been put into place during the global pandemic that helps make things easier for those with various types of loans. The Cares Act, for example, has suspended payments for many federal student loans until September 30, 2020. The interest will not build up on these loans and therefore will not have a negative effect on credit scores for those who take advantage of this benefit.
Stop Automatic Payments
Automatic payments can be useful when you have a reliable income. This method can help ensure you don’t forget to pay for a service you use. But these automatic debits can also be troublesome if you forget to cancel a service you don’t necessarily need during the pandemic. Take a moment to look at all your automatic payments and suspend those that you aren’t sure you will be able to pay.
Reach Out to Your Debtors
Some utility companies and others that provide necessary services are waiving late charges or not penalizing customers if they miss a payment during this time. Check with your providers to see if they are offering these benefits. Especially if you are concerned about your electricity being turned off.
If you could use help getting out of debt or would like more advice on managing debt during the global pandemic, our team is here to help. Get in touch with Bartifay Law today for more information and details on how we can help you get back on the right track.