There are countless worries that the coronavirus crisis has brought upon Americans across the country. Learning how to teach, work, and maintain normalcy while under one roof during quarantine comes with a wide range of new challenges. Even more troublesome than social distancing, however, is the economic impact that COVID-19 has brought about. Within a matter of weeks, businesses across the globe have closed their doors, millions of Americans have lost their jobs, and the stock market has plummeted. Despite the stimulus packages that the U.S. CARES Act provided, it will be some time before the economy is revitalized to the state it was before the coronavirus pandemic.
For Americans worried about protecting their finances during uncertain times, there are steps to take, even during quarantine, to safeguard your financial future. If you’re feeling anxious about your finances, apply these steps to alleviate future financial concerns.
Create or Update Your Budget
Even if you have an existing budget, now is an opportune time to assess your spending habits. If your income has been cut back due to COVID-19-related shutdowns, adjust your allotted spending appropriately. Saving at every opportunity will help make ends meet if money is tight in the future.
If you have time, consider making a budget specifically for quarantine to ensure your spending doesn’t exceed your means. While many households are spending more on at-home entertainment and delivery services, it’s still possible to save when eating out, traveling, and other sources of spending are unavailable.
Build an Emergency Fund
After planning a new budget, you may discover prior spending habits that can be reduced to fund emergency savings. If you’ve been setting money aside for travel or non-essential splurging, consider allocating some or all of that balance for an emergency fund instead. Every little bit that you save now to support you and your family during uncertain economic times could be a blessing in the future.
File Your Tax Return If You Haven’t Yet Done So
Tax season was extended in light of the COVID-19 crisis, pushing Tax Day back to July 15. If you haven’t yet filed your 2019 taxes, be sure to file as soon as possible to avoid penalties. If you receive a tax refund, opting for a direct deposit will allow you to receive it as quickly as possible. Consider stashing as much of your tax refund as possible to your emergency fund to protect your future finances better.
Pay Off Any High-Interest Debt
If you have any high-interest debt, like a personal loan, and your income has remained steady during quarantine and business shutdowns, consider paying off that debt now rather than later. While you may feel a slight financial squeeze in the months that follow, this can save hundreds, sometimes thousands, of dollars of interest in the long run.
Should your income change in the future, making minimum monthly payments may not be possible. If you can’t make regular payments, the interest will continue to accumulate along with late fees. Avoid these financial headaches by paying down that debt as much as possible while you’re able to. Even if you can’t pay it off in full, a decreased balance can significantly help you.
Explore Insurance Discounts & Options
Many insurance companies are offering lower rates since the national quarantining measures began. Many auto insurance companies are offering discounted rates, as fewer people are on the road. If you haven’t received an automatic discount, call your insurance companies directly to learn if you’re eligible for discounts or a lower rate. You may find even lower prices with different providers, so take your time to do competitive research.
If possible, consider purchasing a new insurance policy now. Long-term care or life insurance can take months to be approved, depending on the provider. Starting no while you have space in your schedule to research and compare can make the process feel less tense overall.
Schedule a Consultation with a Dedicated Tax Debt Attorney in Orange, CA
While having debt of any kind can be stressful on a person’s budget, tax debt involving the IRS or the state can be especially challenging. If you’re trying to handle tax debt by yourself and receiving intimidating letters from the IRS or state, do not delay hiring experienced legal counsel to help you through this difficult time.
Morgan Sebastian Law, PC, is a tax debt law firm in Orange, California, advocating for taxpayers before the IRS in all 50 states. Attorney Becky Rose Sebastian has vast experience negotiating with federal and state tax agencies to help her clients with the best tax resolution possible. To schedule a consultation and speak with Becky about your tax issue, call 877-938-1350 today or complete a contact form.