We won’t know the full extent of the Coronavirus (COVID-19) financial fallout for some time but one thing is for certain, there will be widespread job losses and a rough road ahead for most U.S. households.
Wall Street insiders are projecting that jobless claims in coming weeks could approach the all-time record set in 1982.
The U.S. Private Sector Job Quality Index estimates that 37 million jobs are at risk for layoffs. Here is a list of jobs impacted the most by the crisis.
There is debate over whether or not we are already in a recession, but timing aside, it looks highly likely.
Some partial relief may come from Congress soon, as they work on a package to help workers and small businesses hit the hardest. The total funds allocated may exceed $1 trillion.
Here are some things you can do to prepare for the times ahead.
Health and economic conditions are rapidly changing, it’s important to understand the implications and adjust your plans accordingly.
This site lists updates and actions being taken by various government agencies to combat the coronavirus and resulting economic crisis.
This is another government site dedicated to health updates and advice regarding the coronavirus.
Plan for the worst
Focus on building your emergency cash fund. How long could you maintain your lifestyle if all income stopped? Ideally 6 months or more, but that is unrealistic for many. Save any amount you can with each paycheck and only use for true emergencies.
Be brutal about cutting out non-essential expenses. Create a realistic bare bones budget that will allow you to stretch your income. No one knows how long it will take for the economy to recover, so do all you can to conserve what you have.
Defer major purchases and risky job moves unless you are highly confident in your financial position and outlook.
Create an “Income Plan”
Assess your current household income strengths and weaknesses. Consider the following questions to gauge the health of your income streams and areas to focus on.
- Are any income sources already impacted or at high risk during a recession?
- Do you have a diversified set of income streams that would help you survive a major job loss?
- Are you able and willing to supplement or replace your income with a part-time job or freelance gigs?
- Do you need to look at other companies, careers, and/or locations to be more secure?
- Do you know which skills, if acquired, could boost your income and provide more job security?
The bottom line
Financial uncertainty is unfortunately the new normal. Stay diligent and be proactive to make the changes necessary to maintain a healthy income stream. The people at EveryIncome are committed to creating products and services to help you navigate these challenging times.