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Managing your finances during COVID-19 pandemic

If your income changes due to COVID-19 disruptions so should your budget. Here are ways to help manage your finances.

PORTLAND, Maine — Governor Janet Mills announced an Executive Order Wednesday mandating a statewide ban on dine-in service at restaurants and bars, while also strongly urging non-essential public-facing businesses, to close for the next two weeks.

Workers in the foodservice industry have been laid-off or taking reduced hours and shifts. The Maine Department of Labor says nearly 5,000 Mainers applied for unemployment since Sunday, compared to March 2019 where there were only 642.  With gyms, hair salons, and shopping malls potentially planning to close the doors more workers might be hitting the unemployment line.

This compounded with the closings of schools causes unplanned stress on families wondering where to find a new source of income. 

Jon Paradise, the Vice President of Public Relations & Communications at Town & Country Federal Credit Union, says the first thing to do is remain calm and don't panic. When people panic while stocking up at the store they may buy more than they actually need.

"Be careful that your food budget isn't completely out of control and you come out of this with way more debt than you expected," said Paradise. He has advice on how to change your budget when your income changes.

Build Your Emergency Savings

It is important to have an emergency saving set aside to weather unexpected emergencies and avoid falling into debt if you have a disruption in income. If your emergency savings are not quite where you would like it, don’t panic. Here are some ways to help build it up quickly.

  • Expecting a tax refund? Plan on adding it to your emergency savings.
  • Receiving unexpected money? If you receive a bonus, birthday gift or other refunds, be sure to add to your savings.
  • Spending less than normal? Spending less on gas, nails, hair, gym membership or eating out? Simply transfer the amount you would be spending on these things to your emergency savings.
  •  Automate your savings. Figure out how much you want to save each week for your emergency fund. You can set up an automatic transfer right from your payroll or checking account to your emergency savings account. 

Assess Your Spending

A change in income requires a change in spending. Now maybe the time to analyze your spending habits and make some adjustments to your budget.

  • Stocking up on supplies can help us prepare our homes for the unexpected, but overbuying will stress your food budget.
  • Don’t spend money on unnecessary things. Prioritize your needs over wants.
  • Cut back on non-essential spending. Review recent checking account and credit card statements and figure out what you are paying for each month. The cost of subscriptions, magazines, streaming services, gym memberships can add up. If you aren’t using them, now may be the time to cancel and save.
  • Now maybe a good time to cut the cable cord. You may be able to save money each month by switching to one of the streaming entertainment services.
  • Avoid “retail therapy” and shopping online. While it may relieve some of the stress you may be experiencing now, it can leave you with unplanned credit card debt.

Monitor Your Credit Score

Remember to check your credit score regularly to know where you stand and to keep your score in good shape.

Make Wise Choices 

The recent ups-and-downs of the stock market are making a lot of people uneasy. Many employees today have their retirement savings in 401K accounts. Remember, 401K’s are long term savings accounts. Avoid the temptation to dip into these accounts to get by during uncertain financial times.

"It's not completely reconfiguring your finances, it's figuring out and assessing your current situation and making a decision based on that."

Paradise says loan deferments and waiving certain fees might apply to your financial situation. There are financial experts available to help even if you aren't a customer at this time. 

TCFCU Call Center - (207) 773-5656 or contact us at info@tcfcu.com 

RELATED: How to file for unemployment in Maine if your job has been affected by coronavirus

RELATED: Gov. Mills bans dine-in service at restaurants, bars and gatherings of 10 people or more statewide

RELATED: Legislature passes budget, emergency steps to fight coronavirus

 At NEWS CENTER Maine, we're focusing our news coverage on the facts and not the fear around the illness. To see our full coverage, visit our coronavirus section, here: /coronavirus

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