Before COVID-19 made it to America’s shores, the economy was in great shape. Unemployment, in particular, was incredibly good. One year ago, in October 2019, the jobless rate fell to its lowest level in 50 years at 3.5%. Federal Reserve Chairman Jerome Powell said the economy was “in a good place” the government’s job was to “keep it there as long as possible.” Unfortunately, the coronavirus changed all that.
In April, the unemployment rate was over 14%, and the economy was struggling with the impact of the deadly disease. President Donald Trump took swift action and in a few months, the jobless rate was dropping back to where it was before the pandemic. The CARES Act, a relief bill signed in March, was a big driver of the recovery. However, aid has now run out and it looks like we might be backsliding.
American families are going to have to insulate their own finances if they want to continue living comfortably, no matter what the economy has in store for them. Tate Advisors and other companies can help with that, but workers will have to do some of the preparations themselves, as well.
Jobless Claims On the Rise
Before we get into the advice to make it through the uncertain employment market, it’s important to know what’s going on there. Usually, around this time of year, businesses start massive hiring campaigns for the holidays. Retailers are flush with customers and need more people to keep up with it. There’s certainly seasonal hiring taking place, but there are also layoffs.
The airline industry is being hit especially hard. Airlines have furloughed and laid off thousands of workers. That’s not the only sector experiencing difficulty, though. Law firms across the US are cutting staff, so are hotels, restaurants, and others. There’s some expectation that these job cuts will continue through the fall as the country is still dealing with the virus.
That means families are going to need to sit down and figure out how to protect their finances.
Make a Plan
If you are concerned about the state of the economy and how it will impact your employment, sit down and make a plan. Being prepared for the worst is always the best idea. Here are some tips to help you get started.
Create a Budget
Budgets are incredibly useful tools to help keep you on track. You can do this in a few easy steps and by using a program like Google Sheets, which is free for users.
The first step you want to take is gathering all of your expenses and writing them down. Don’t leave anything out, even add groceries, gas, and your medications. After you add everything to your expenses, add your income. Finally, add goals to your list.
For instance, if you want to create an emergency fund, that’s both a goal and an expense.
Get That Emergency Account In Order
Speaking of emergency funds, you need one. If your employer suddenly decides to start laying people off to save money, you will need something to fall back on. Typically, you will want between three to six months worth of expenses in this account, but there’s no shame in starting one week at a time.
Pay Down Debt
Finally, and just as importantly, you want to pay down your debt. If you have a lot of high-interest credit card debt, consulting with a debt consolidation firm like Tate Advisors is a good idea. They will help you get all of those payments under one loan to make it easier for you to pay it off.
Debt consolidation loans often have lower interest rates to help people get out of debt quicker. In doing so, you will not only insulate yourself from the consequences of the COVID-19 pandemic but also just be in a better, less stressful place overall. Nobody wants to worry about their finances all of the time.