Dealing With a Loss of Income Due to COVID-19? How to Make it Through
The ongoing COVID-19 pandemic has caused a significant loss of job income for many Americans. Between hours being cut, companies putting employees on furlough, or workers being forced to take unpaid leave because of the virus, there are many reasons why Americans are dealing with a loss of income during this challenging time. If you find yourself in this difficult situation, it is important that you know your options.
Here are a few ways that you can mitigate the effects of a loss in job income so that you can protect your financial future and your mental health.
Know That You Are Not Alone
It can be a hard pill to swallow when your income is slashed. However, it is important to remind yourself that you are not alone. According to new data from Morning Consult, 13% of survey respondents reported a loss of income or work pay for the weekend ending September 11. This is an increase from a low of 11.4% throughout the pandemic.
The workers that are most likely experiencing a loss of income are those working in service industries, such as restaurant employees. For example, food and beverage workers are reporting a loss of pay at a rate of 25.7%. This is an increase from the 19.1% reported by these workers over the last month. Leisure and hospitality workers are also reporting significant drops in job pay as the pandemic drags on. The increase is being attributed to the rise of the Delta variant affecting these industries.
Assess Budget and Plan Accordingly
The very first thing that you should do if you experience a loss of income is to take a hard look at your budget. This means that you need to be realistic about your expenses in the coming months as you deal with this financial blow. Start by identifying all of the income sources and assets that you have on hand.
You then need to review your living expenses and identify costs that you can eliminate in the short term. For example, do you really need that gym membership if you can get outside and exercise? What about all of those streaming services? By reducing your expenses to include essential items, you may find that you are able to make up the difference in the loss of income.
Talk to Creditors
If you are paying off debt, it is a good idea to reach out to your creditors to see if they can help you. You may be surprised to learn how willing these creditors are to work with you as you navigate through this time. Some creditors may be able to extend payment deadlines or waive late fees. It never hurts to ask.
Explore Work From Home Options
If you are struggling with a loss of income due to having to take time off to care for quarantined children, you would be wise to reach out to your manager about the option to work from home. Most employers are understanding that it is challenging to parent students during the on-again-off-again school situation. Your employer may be willing to let you continue your work and receive your paycheck if you can pivot to the online space successfully.
There are a number of government and community resources available to workers that have been affected by the pandemic. Your human resources contact should be a good source of information for you as you explore your options. The Department of Human Services website for your specific state is another good source. You may be eligible for a variety of supplemental income programs to help you to bridge the gap of your lost wages.
Lean on Assets
If you are lucky enough to have some assets to draw on, now is the time to do so. Look into leaning on your liquid assets first. This includes cash savings accounts or any other non-retirement investments that you may have. Be sure to make a plan to pay these investments back after you are back to earning your full income.
It is important not to panic when your income has been reduced. Taking the time to understand your options and make a game plan will help to get you through this time.