Money continues to be the leading cause of stress in America, and the COVID-19 pandemic is only adding to the financial stress on families due to record high unemployment, says Julie Kalkowski, executive director of the Financial Hope Collaborative at Creighton University. Before the pandemic, 49% of Americans lived paycheck to paycheck, according to a recent survey from First National Bank of Omaha.
Kalkowski has dedicated her career to helping financially challenged people achieve financial stability.
“The pervasive financial stress the majority of Americans feel is now on steroids as most Americans did not have savings before this crisis hit,” said Kalkowski. “Knowing that you are not in this alone is important to keep in mind as you move forward.”
She manages a program in Creighton’s Heider College of Business that builds support and accountability through the education of individuals on the psychology of money, tracking expenses, saving for emergencies and repairing credit.
Kalkowski recommends the following to help individuals reduce financial anxiety both during and after the COVID-19 pandemic:
• Don’t panic. Individuals can find comfort in knowing they are not in this pandemic alone. Avoid using credit cards and payday loans to alleviate debt – the high interest rates can have long-lasting negative impacts. Instead, it’s important to be resourceful and resilient, seeking out creative solutions, such as contacting landlords, utilities and creditors to negotiate payment plans. Ignoring bills can make a bad financial situation worse.
Additionally, Kalkowski warns individuals to beware of scams, as they seem to be proliferating right now. Thoroughly vet offers by placing additional calls and/or seeking out additional information from trusted sources online. If an offer seems too good to be true, it likely is. To steer clear of identity theft, avoid sharing personal information through text or email.
• Focus on what can be controlled. A spending plan is the foundation of all financial planning, and monthly cash flow management is critical. Evaluate how much money is coming in each month, prioritize what bills need to be paid, eliminate nonessential spending and track expenses by keeping receipts. Adjust expenses accordingly each month, focusing on mortgage or rent, utilities, groceries and items needed to shelter in place. Having a plan will reduce anxiety.
• Make a plan. Set realistic financial goals and determine what can be done differently over the coming months, focusing on needs versus wants. While savings are a luxury for most families, setting aside as much money as possible into an emergency savings fund is a great use of federal stimulus money, Kalkowski says. After the pandemic, Kalkowski recommends routinely adding to savings and reducing nonessential spending, such as consolidating cable plans and making meals at home instead of purchasing fast food. Also, seek out bargains and compare prices when shopping to get the best deals possible, but only for needs, not wants. Staying purposeful with spending can help individuals avoid spending more than anticipated.
• Locate resources. Individuals who were laid off or furloughed can locate where to file for unemployment benefits through careeronestop.org. Nonprofits also may be able to help. For more information on available assistance, call 211 or visit 211.org.