Working on Cash Flow in a Cash Restricted Environment
All of us have found ourselves in new territory with the coronavirus. We're sheltering at home, losing jobs, and our medical treatments may be ceased or altered. For many, this is far more difficult than living paycheck to paycheck, and running out of money is becoming more of a possibility. No matter what, we still have mortgages and rents to pay, food to buy and other necessary bills to pay. Some more important than others and some may have some flexibility. Just don’t ignore any bill. Let’s go over some of the options you may have. If you have lost your job, apply for unemployment as soon as possible.
First, take stock of your bills. All of them. Even the internet and tv subscriptions and don’t forget bills that are on auto pay. Cancel all unnecessary items. Now, prioritize. What has to be paid? Mortgages, Rent? Call your Mortgage Lender and see if they have payment options. Be sure to understand the fine print before agreeing to any plan if they are available. If you are renting you may have the option to defer your rent. Currently you cannot be evicted. Usually paying off credit cards, medical bills and student loans are a good thing, but right now, pay only the minimum. Don’t assume you can change payment plans. Call and have this formally set up. Call your auto creditor and see if they have options on reducing or deferring auto loan payments.
If you’re having problems coming up with needed cash, ask family members is they can help. If you have good credit, see if you can get a loan.
Make a list of all bills coming due in two to three months and call each company. You may be able to establish a more affordable payment plan.
Utility companies: water, electricity, and gas companies are not shutting off services. Be sure to see if you qualify for this service. Check with your internet and phone providers as well.
Now is the time to stop frivolous spending. Buy necessary items first - food and medicines. Use credit cards for these items to free up cash. You might realize that if you are not using your car (saving on gas), buying lunch out, going to restaurants, going out to movies or sporting events, you already should have more cash in hand. Most communities have grocery stores that are discount grocery stores. See if you can get food items from them, saving some money.
A last resort is to tap into your retirement account. Generally, this is not recommended because they can come with tax penalties. The new Care Act will allow borrowers to avoid penalties for withdrawing money from retirement savings accounts as long as it is repaid within three years. I would suggest speaking to your financial advisor to review all associated cost before making a withdrawal from your retirement account.
If you can’t find a financial advisor, look for a financial counselor. Again, I am a Free Myeloma Financial Coach for you.
Diahanna Vallentine, BCPA
Thanks to our Myeloma Coach sponsors