Losing a job or having hours cut can be devastating financially. When these kinds of emergencies happen, it’s best to have a financial emergency plan ready to go — but that’s not always a reality.
It’s clear that we (Goodbudget) are not capable of providing answers to address every Goodbudgeter where they’re at. But, we can say that for folks experiencing a partial or total loss of income, there are some things you can try to help close the gap.
1. Apply for unemployment, paid family leave, or disability leave
You can apply for unemployment insurance when you become unemployed at no fault of your own, and you can check to see if you’re eligible for these benefits online. (Many states are also amending their laws to support the influx of cases that result from businesses closing due to COVID-19.)
States that offer paid family leave (PFL) and disability leave are still in the minority, but they’re meant to protect workers from loss of income when they need to stop working to care for a sick loved one, or when they cannot work themselves because they’re sick. Check your state laws to see if they have programs like these.
2. Take advantage of paid sick leave
In the United States, employers are not required to offer paid sick leave benefits, but some still do. Check with your employer or human resources staff person to see what benefits they offer for folks that need to stay home due to illness. If you end up needing to stay home, you’ll know how to access these benefits.
3. Pick up a gig
If you’re well and can work, but lost your main source of income, try picking up a gig. During the coronavirus pandemic, hiring for jobs like grocery store clerks and delivery drivers soared because those who are isolating or quarantining themselves need items delivered to them.
4. If you have kids…
If your income qualifies your children for free or reduced lunches at school, you may still be able to receive those benefits even if schools are closed due to a natural disaster or shelter in place orders. Even if your child does not usually receive free or reduced lunch at school, they may be eligible for meal programs in your area. Check with your local school district for information.
5. Seek forbearance on your federal student loans or mortgage
If you’re experiencing financial hardship, you may be eligible to seek forbearance on your student loans or mortgage. Seeking this kind of relief allows you to temporarily press pause on making payments. Unfortunately, that doesn’t mean they’ll go away forever. You may be asked to pay the balance of your missed payments in full at the end of the forbearance period, or those payments may be tacked on to the end of your loan, or some other agreement may be made. Check with your mortgage or student loan lender to see what kinds of payment plans they offer.
If you’re not eligible to seek forbearance on your student loans specifically, you may be able to apply for an income-based repayment plan instead. Those plans set your monthly payment based on how much money you’re bringing in. Therefore, if you’re earning less, your payment will be smaller too.
The US CARES Act temporarily broadened the pool of folks who were eligible to seek forbearance to include those who have federally backed mortgages (i.e., by Fannie, Freddie, and Department of Urban and Housing Development [HUD] loans). Again, you may still qualify even if your loan isn’t a government backed one.
6. Find help in your area
There are new and existing programs out there that aim to help those in need during the current coronavirus pandemic. Find programs in your area for things like food and bill paying assistance.