The COVID Comeback: How to recover your finances after the pandemic

FROM WFLV NEWS JAcksonville,, FL / By Josslyn Howard

Whether you lost your job or have sky-high medical bills, many are asking the question, “How do I come back from this?”

COVID-19 has altered many people’s lives in so many ways, including financially.

Whether you lost your job or have sky-high medical bills, many are asking the question, “how do I come back from this?”

“I got furloughed March 17,” said Kimberly Kelly. “Like a domino effect of everything going wrong that could go wrong.” Kelly, like millions of Americans, is drowning in bills accumulated during the pandemic.  “Bills are getting behind,” Kelly said. “Rent is getting behind. My vehicle was broke down so I couldn’t get to work.” Kelly is working three jobs trying to catch up. “They got in this financial rut and they’re trying to dig themselves out,” said Jason Fuchs, a financial advisor with Sage Path Financial Advisors. Fuchs is working with countless people financially recovering from the pandemic. “Obviously, the damage is already done,” Fuchs said. Fuchs says in order to recover—it’s going to take hard work and a lifestyle change.

MAKE A BUDGET

“The biggest thing to focus on is the budget,” Fuchs said. Include the necessities—housing, utilities, vehicle payments, groceries and old credit card bills. “Then you want to look at, what can I cut back on?” Fuchs said. Maybe it’s fast food, streaming services, or shopping sprees. Track every dollar you spend. “Restructure,” Fuchs said. “Once you figure out what you’re spending your money on, once you created this budget, live inside that budget.” Fuchs recommends using an app like Mint which tracks your spending and the budget you set.

RENEGOTIATE YOUR BILLS 

Next, can you cut down the price of your necessities further? “Not many people know you have the ability to renegotiate your bills,” Fuchs said. Some companies may lower the amount you owe them. “Other companies will lower the interest that you’re paying, so that money you’re paying over the long term will be less,” Fuchs said. You can also negotiate the interest rate on your credit card debt. “I’ve seen someone go from 30% to 10%,” Fuchs said. It even works for those of you with sky-high medical bills after COVID. “Some hospitals will accept a lesser monthly payment than what is stated on the statement and they won’t charge you interest,” Fuchs said. Call these companies and make sure you’re talking with someone who has the power to renegotiate your bill. “I always start with trying to pay someone less,” Fuchs said. “And if not, then start talking about the interest rate. ‘you’re charging me 20%, the guys down the street will only charge me 10%.’”

CREATE AN EMERGENCY SAVINGS ACCOUNT 

Once you have trimmed all that you can, save every extra dollar. “You want to rebuild that emergency savings account,” Fuchs said. Fuchs says your emergency savings should cover three to six months’ worth of your budget. “I get it,” Fuchs said. “Three to 6 months is a lot of money. Not doing anything is not a solution. You have to do something.” If needed, start with small contributions regularly until you’re at the point you can add more. “Once you get to that 3 to 6 months, then you can start having fun,” Fuch said. “Go buy that car you’ve wanted or take that vacation you wanted to buy. Because that that point, you’ll have that financial freedom we all strive for.”