Last Updated: April 5, 2024
Disclaimer: We are not qualified legal or tax professionals and are not giving advice. Always speak with a qualified professional before making any legal or financial decisions.
In the wake of COVID-19, a startling 48% of Americans find themselves grappling with reduced income, as layoffs and wage cuts become the new reality for many. As we navigate through these unprecedented times, securing our financial future has never been more critical.
From reassessing our spending habits to exploring new income avenues, it's time to consider how we can adapt to this new economic landscape. In this guide, we'll explore proven strategies for financial recovery and resilience, helping you to not only survive but thrive in the post-pandemic world.
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The Numbers Behind the Covid Financial Pandemic
According to a report by the
Pew Research Center, the numbers are depressing.
- At least ½ of non-retired adults find that they can not reach their financial goals
- 55% of low income non-retired adults cannot reach their financial goals
- 25% of people over 50 reported that they have delayed or expect to delay retirement, highlighting the need for strategies on
how to build retirement funds during COVID-19.
- 25% of all people have been laid off, taken a cut in pay or live with someone who has
- 63% of both Gen Z (18-23) and millennials (24-39) households report lower income
Once the researchers looked at individuals, they found that 40% of all people have been laid off or taken a pay cut. This breaks down to:
- 44% of men
- 43% of women
- 40% of white households
- 41% of black households
- 58% of Hispanic households
- 54% of Asian households
Even looking at the numbers by income, no one has been unaffected.
- 50% of low income households
- 45% of middle income households
- 33% of upper income households
There are very few among those with a high school degree, some college, or a bachelor’s degree. Each group showed 45%, 44%, and 41% respectively.
Basically, lower-income and minority workers were hardest hit, mainly because they work in jobs that can not be completed remotely. These in-person jobs were either curtailed or lost completely. Learn
how to get credit card debt relief from the coronavirus pandemic to manage these challenges.
Savings Versus Spending
Interestingly, savings versus spending has changed. Fifty-three percent of upper income workers cut their spending, while 43% of middle income workers did the same. Only ⅓ of low income workers were able to cut spending.
The cuts by the upper income workers have a trickle down effect on middle and low income workers. The less the upper income workers spend on dining and entertainment, the harder it is for middle and especially lower income workers to cut spending and increase savings.
There is a bit of good news. Since April 2020, more than 50% of Americans feel like their financial situation has improved. But that still means that just under half of us are feeling financial hardships.
Ways to Make Money
Most people have discovered that adding low paying job after low paying job is not a viable way to live. If you have certain skills, you may be able to translate them online. Check out this
article to see if you are interested in any of the suggestions.
Gig employment like Uber or grocery delivery is also an option.
Thewaystoweath.com ranks the following 32 gig jobs as the “best.” Just remember to read the fine print!
- DoorDash
- UberEats Delivery Drive
- Uber Driver
- GrubHub
- Lyft
- Instacart
- Taskrabbit
- Amazon Flex
- Rover
- Bellhop
- Dolly
- Gigwalk
- Shipt
- TaskEasy
- YourMechanic
- Helpr
- Education First
- HelloTech
- 99 Designs
- Upwork
- Fiverr
- Handy.Com
- Care.Com
- Soothe
- Guru
- Thumbtack
- Freelancer.Com
- Airbnb
- Turo
- VRBO
- RVShare
- Boatsetter
A final way to make money is to sell off stuff. If you have a storage unit or a garage with more boxes than parking space, sell off the excess. Not only will you save on storage fees, but on the emotional stress that comes from excessive clutter. And as a suggestion, if you can’t sell it, consider donating it. Someone needs it more than you do!
How to Spend Less Money
Your first step in spending less is to know exactly where every penny is going. Track every cent you spend for at least a month. Put all that data into a written form or a spreadsheet and examine your spending. You’ll see places where you can cut expenses immediately. Don’t forget to look at subscriptions. Those sneaky monthly purchases add up fast.
Next, set up a budget. It doesn’t have to be hard or penny perfect, it just has to be written down and followed. Try the
50/30/20 budget for a more flexible method or download a free app.
Look for other ways to save money. Take a hard look at your
grocery budget and find ways to save. Food prices won’t be going down. Look at non-essential spending like clothing, vehicles, and other expenses. Is there a way to cut back on those costs? For some ideas, follow this
link.
Here are more ways to cut expenses:
- Find cheaper housing options like downsizing, sharing a place, or negotiating rent
- Look at lower-cost insurance, cell plans, cable, and internet
- Cut subscriptions and memberships you can live without
- Reduce utility bills through conservation and efficiency
- Change eating habits, like eating out less and preparing meals at home
- Use discounts, coupons, shop sales, and buy store brands
- Find free entertainment options like parks, libraries, and free events
- Review all recurring expenses and look for areas to save
For more specific tips, see our articles on reducing grocery costs, saving on utilities, and cutting discretionary spending. Every dollar counts when trying to cope with reduced income.
Debt and Savings
If you are like most Americans, you also have debt and debt is dragging you down. You’ll find many articles on the
Pacific Debt Relief blog, that deal with eliminating debt. Check them out for answers on how to cut debt.
Managing Debt During Financial Hardship
Many people have taken on additional debt during the pandemic or are struggling with existing debt as their income has decreased.
Here are some strategies for managing debt when finances are tight:
- Prioritize paying for essential expenses like housing, utilities, and food first
- Contact your creditors to explain the situation and request reduced payments or deferments
- Consider consolidating multiple high-interest debts into a lower-interest loan to reduce monthly payments
- Use balance transfer credit cards to save on interest expenses
- Set up payment plans with collection agencies if you have debts in default
- Explore options like debt settlement or bankruptcy if you are unable to repay your debts
For more help getting out of debt, check out our articles on lowering monthly payments and
debt settlement vs. bankruptcy. Our experienced debt consultants can also provide a free evaluation and personalized advice.
Generating Income
With many people dealing with reduced income, finding ways to bring in additional money can provide relief.
Here are some options to consider:
- Take on part-time or freelance work to supplement your income
- Monetize existing skills or hobbies, like consulting, tutoring, or selling handmade crafts
- Perform odd jobs like dog walking, house cleaning, yard work, and junk removal
- Rent out extra space, vehicles, equipment, or tools you aren't using
- Resell items online through platforms like eBay, Facebook Marketplace, Craigslist
- Participate in focus groups, take surveys, or complete tasks for money
For more ideas, see our articles on
making money from home and turning hobbies into income. Every little bit helps when trying to cope with financial hardship.
FAQs
Our Take
One common complaint is that people are told to cut out the luxuries, like coffee shops, and then suddenly expect to have wealth. It doesn’t work like that. The way it works is that you identify how to save money now to put yourself in a better position later.
If you buy five cups of $3.50 coffee each day on your way to work, you are racking up a coffee debt of $875 a year. Can you cut it down to one coffee shop cup a week and put that $700 toward your retirement, debt, or savings?
Instead of buying a new car/cellphone/game system that is new and shiny, can you make do with an older model that works just as well but is not as flashy and is entirely or mostly paid for?
Can you live without spending money for
30 days? Give it a try. It may work for you and help set your feet on a stronger financial path. There are ways to make money and there are ways to spend less. It takes some work, but with that effort and a good budget, you can beat the post-covid income slump. It's also important to be aware that
banks are closing credit cards and cutting credit limits due to the pandemic, which may affect your financial planning.
Conclusion
The financial impact of COVID-19 has been difficult, but there are ways to take control of your finances even during times of hardship. Understanding
the best debt relief options can be a crucial step toward financial recovery. The key is to stay focused on the essentials, look for ways to increase income, reduce unnecessary expenses, and manage debt responsibly. With planning and discipline, you can stabilize your finances.
Don't be afraid to ask for help - there are many free resources and people willing to help. Have hope - we will get through this together. Though the road may be bumpy, you have the power to move towards a more secure financial future. Stay strong, be resourceful, and don't give up. Your finances may be strained right now, but better days lie ahead.
If you are struggling with overwhelming debt and want to explore your debt relief options, Pacific Debt Relief offers a
free consultation to assess your financial situation. Our debt specialists can provide objective guidance relevant information and support to help find the right debt relief solution.
*Disclaimer: Pacific Debt Relief explicitly states that it is not a credit repair organization, and its program does not aim to improve individuals' credit scores. The information provided here is intended solely for educational purposes, aiding consumers in making informed decisions regarding credit and debt matters. The content does not constitute legal or financial advice. Pacific Debt Relief strongly advises individuals to seek the counsel of qualified professionals before undertaking any legal or financial actions.
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