If you’re feeling stressed over your finances as a result of Covid-19, you’re not alone. In fact, according to a recent survey, 79 percent of women reported feeling weighed down over money concerns, an increase from 67 percent last fall.
Of the women who reported financial worries, 72 percent said they were worried about not having enough retirement savings to live comfortably, while 71 percent were concerned about their ability to save for goals outside of retirement.
“Everyone is struggling. I literally don’t know one woman who has not had some sort of hard time. But it doesn’t make you any less,” said Tiffany Aliche, better known on Instagram as “The Budgetnista.”
Aliche, a financial educator and author of “Get Good With Money,” gave Know Your Value her top advice to help lighten financial burdens you may be facing, especially as begin to emerge from the Covid-19 pandemic.
1. Don’t over-worry about aggressively paying off debt.
While avoiding sky-high interest rates is always ideal, don’t beat yourself up if you need to take a step back during this difficult time to focus on more pressing issues, like family medical bills or necessary home safety updates. “It is OK to be not as aggressive in paying down debt as you were before,” said Aliche.
2. Prioritize saving
Many of our savings accounts have taken a huge hit as a result of Covid-19. As we emerge on the other side of the pandemic, it’s important to take a hard look at your emergency fund and slowly build it back up if it has been depleted.
A fully-funded emergency fund is at minimum three months of your take-home pay, explained Aliche. If you’re currently employed but want greater financial security, “ideally, you have calculated the amount of time it typically takes to find a job in your industry” in case you suddenly find yourself without a job, she said.
Aliche gave the example of her mom, a nurse who has never had to worry about job scarcity. That said, her friend who’s in the engineering field, found that it took her about six to eight months to find a new job.
Once you’ve figured out how long it can take to replace your job, Aliche advised saving for that amount of time, plus a little more if you’re factoring in potential job scarcity in the future. That said, once you’ve hit your emergency goal — go ahead and focus any extra cash on paying down existing debt.
3. Family over bills
Don’t stress about paying off a credit card bill if you really need to focus on essential needs for you and your family. “Make sure you have enough for your health and safety expenses first,” advised Aliche. “Call and let [creditors] know … The pandemic is a worldwide issue. Many places have a hardship program in place, even for a weather event.”
In other words, some credit card companies will work with you. That said, if they won’t, be aware that “the threat is going to be that creditors will call you morning, noon and night,” explains Aliche.
“The magical wand you have is a cease and desist letter,” says Aliche. “There’s something called the Payer of Debt Practices Act. There are certain things that a debt collector cannot do.” Aliche explains that if you have creditors calling your phone and even your family members (which does happen!) — this is not allowed.
Don’t worry, this won’t require lawyer fees. Aliche explained that you can search for a cease and desist letter online, tailor it to your situation and fax it to your credit card company.
4. Get creative if you’re out of work
Now, if you happen to have lost your job, Aliche said it’s time to get creative when thinking about ways to replace that income. Luckily, this is an area where social media comes in clutch.
“There are so many women entrepreneur groups on Facebook,” said Aliche. “What I see over and over is that people will post looking for someone. The number one thing I see people looking for is an admin.”
5. Don’t stress over a bad credit score
This may come in as a shock, but Aliche encouraged women not to stress about credit scores. “Of all of the financial things to go through, credit is one of the easiest to fix,” said Aliche. “It’s all about tips and tricks.”
For example, she advised:
-Ask close family members or friends to add you onto their account as an authorized user. Aliche suggested that you make sure the person is responsible and that their balance is below 30 percent.
-Pay down your debt. Do it at any pace, but Aliche noted that it’s hurting your credit score if you have a balance above 30 percent.
-Work toward paying off your entire balance each month. This will improve your credit score drastically.
And if you have one or two cards that have decent balances (but it will take a while to pay them down entirely), Aliche suggested opening another card and putting your smallest recurring bill on it. Then, pay it off each month.
Finally, and this is an important one: make sure you’re paying off your debt after the statement date. Otherwise, creditors might not note that you’ve spent any money on the card and it will look like you haven’t been using it.