Managing Debt During COVID-19

May 29, 2020

Managing your finances, bills, and debt is always a necessity, but how does this change when there is a global pandemic? Since COVID-19, almost 40 million Americans have filed for unemployment. Now, these individuals are facing the stress and challenges of determining which bills must be paid now and which can be deferred temporarily.

Unfortunately, many Americans were already experiencing financial challenges. A 2019 study found that nearly 70% of respondents had less than $1,000 in savings, and the top reason respondents gave for not having enough savings was a result of living paycheck to paycheck. While this paints a grim picture financially, there are some simple steps you can take to weather this storm.

Make a list of your bills

Gather all your bills and form a list. Make sure to include rent or mortgage, car payment, utilities, credit card debt, student loans, medical bills, personal loans, and anything else. Be sure to also factor in how much you need for food, medicine, and other necessities.

Then prioritize paying debts

You will want to prioritize paying debts whose non-payment will immediately impact you and your family. These are debts that are tied to a tangible asset, such as a house or a car. For example, if you don't pay your mortgage, you could eventually lose your home due to a foreclosure. Similarly, your car might be repossessed if you don't make your monthly installment payments.

Consider payment plans + contract changes

Many companies have special programs to help those in need right now. Reach out to the companies you owe money to and see if they have any payment plans or deferred payment options available. Then try to work out a new payment plan with lower payments or delayed due dates. Be sure to get any changes to contracts in writing.

Find mortgage relief options

If you can make your mortgage payment, do so. But if you can't? Contact your lender today and ask for help. The Consumer Financial Protection Bureau has a guide to coronavirus mortgage relief to help you find the right options.

Prioritize car payments

Car payments are one of the most important payments to make because if you miss a payment or default on your loan, it will stay on your credit report for seven years. Many auto lenders have announced payment deferral programs, but each lender has its own terms and conditions. Contact your lender to see the options available to you.

Contact your credit card company

Some credit card companies have been providing assistance, such as allowing a skipped a payment or a temporary lower annual percentage rate (APR). Contact your credit card company or bank to see if they have any relief provisions in place. This can help you prioritize debt and provide some financial comfort before having to make a payment.

Check into student loan payments

The Office of Federal Student Aid has placed student loan borrowers in forbearance, which means that depending on your situation, you could stop making monthly payments through September 30, 2020. This is an area where this money can be used for higher priority debts. Check with your loan company to find out if they have any relief options.

Join the Debt Free Life program

If you want to eliminate all your debt without spending any extra money, our Debt Free Life program can help.

With Symmetry Financial Group’s Debt Free Life program, you will use the cash value of a life insurance policy to pay down your debts. This time-proven method allows you to pay down debts on a schedule that works for you. After you pay off your debt, the remainder of the money is purposed for your retirement.

As this is a life insurance policy, you are also protected with comprehensive coverage should you pass away, become disabled, or face a critical illness. This provides peace of mind in knowing that you and your loved ones are protected in the event of the unexpected.

Connect with a Symmetry agent

Meet with a Symmetry agent online for a virtual policy review and a personally customized debt plan. Request more information on Debt Free Life today to see how it can help you achieve your financial goals.

Our clients are real people - with real debt - who got rid of it on a schedule that worked for their lifestyle. Watch their stories on our Debt Free Life Testimonials page!

This article is written for informational purposes only and should not be taken as financial advice. For a detailed consultation regarding Debt Free Life, please reach out to your Symmetry Financial Group insurance agent.

 

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