5 Tips to Improve Your Budget During the COVID-19 Pandemic

As most of us continue to hunker down and wait for COVID-19 outbreak to pass, here are some helpful budgeting tips that can possibly ease the pain during this difficult time. It’s hard not to be alarmed, but If you can’t seem to keep your mind off the volatile and unsettling stock market we've been facing since mid February (which you have little control over), one thing you can count on are your financial decisions you make moving forward.

1. Increase that emergency fund

Since you will be having minimal expenses in entertainment and commute such as, eating out, movies, concerts, retail therapy, gas, and Starbucks, this will be the perfect time to build up that emergency fund. It is recommended to keep at least three to six months’ worth of cash stashed for a rainy day to cover your basic expenses. If you don’t have an emergency fund, now’s the time to defer some of that money you aren’t spending. Hopefully this virus outbreak will end before you having to tap into it.

2. Come up with a budget that works for you

This may not apply to everyone, but another way to keep you from overspending in general is to follow your personal financial plan if you have one, or a basic “50/30/20 rule”. Here’s how you can break it down:

50% of after-tax income goes to Needs

These are those bills you get in the mail and cringe every time. The absolute must pay that is necessary for survival like; rent, mortgage, utilities, insurance, bills, groceries, minimum debt payments. In other words, half of your after-tax income should cover your needs and obligations. If you see yourself over that percentage, you may need to look at cutting down on the wants and your lifestyle.

30% of after-tax income goes to Wants/Fun

No one wants to just plan for the future and be miserable in the NOW, so yes, you should have a “fun” budget as long as you can plan and maintain it. Wants are all the things you spend money on that is not essential so this is the area that you can adjust if you see yourself going over budget. This is your eating out, going to the movies, travel, retail therapy; the little extra things that you spend on to make life more enjoyable. They can add up quickly so cutting this down when appropriate can help you loads. For the time being, you should be able to shift some of this in your emergency fund.

20% of after-tax income goes to Savings /Future You

Finally, this is allocating your income to your savings, or your emergency fund as well as your investments. These include retirement contributions like 401(k)s, IRAs, Roth IRAs, SEPs and non-retirement accounts like individual and/or joint accounts, as well college savings accounts or UTMA accounts for your kids. It’s important to try to bump up your retirement savings now while you still can while your spending is down. If you haven’t already set up a systematic contribution, now is the time to add or bump it up. Debt payments above the minimums like paying additional principal into your mortgage or credit card debt more than the minimum payments is also included in this allocation.

Remember, this mix is more like a guideline and that you’ll need to adjust the weighting depending on where you are in life and what you really consider to be “needs” and “fun”. For instance, a gym membership, monthly spa or massages can be a “need” for some, while others consider those non-essential expenses. The point is to be mindful of your spending and finding ways to cut back, and most importantly, to set aside at least 20% for your future self and family.

For existing financial planning clients, login and set your expense categories to track spending and adjust when needed. If you are not a client, please visit our private wealth page for more information.

3. Keep credit cards unclogged

If you have credit card debt, continue paying your minimum balance as long as your income hasn’t been affected. Best thing is to try to keep your credit limit available for any further emergencies. You can use a card with a long zero-percent financing period to pay down some credit card debt. If you have two or more credit cards, studies show that by paying down the smallest balance first regardless of interest rate, you will feel accomplished and become motivated to continue paying off the remaining card balances.

4. Look into Loans and Mortgage Relief Programs

Many financial institutions are responding to the pandemic to help, so the best thing to do is visit your banks, mortgage, and credit card company websites to the see what they are offering to customers affected by the coronavirus. This is particularly helpful for homeowners who can qualify to delay their mortgage payments for some up to six months. See below for a list of these financial institution with contact information and links to their coronavirus help pages.

Ally

Home loan payments for existing customers can be deferred for up to 120 days. No late fees will be charged, but interest will accrue. For payment assistance, customers are encouraged to apply via their Ally account online.

Tel: 866-401-4742.

For more information and updates, visit Ally’s coronavirus help page.

Bank of America

On auto loans, personal loans, mortgages and home equity loans, clients can request deferral of payment, with those payments added to the end of the loan. So long as clients are up to date, no negative credit bureau reporting will be made.

Clients facing financial hardships related to the coronavirus are encouraged to visit Bank of America’s coronavirus help page.

BBVA USA

The bank has established an online portal to receive applications from customers requesting a deferral or extension of payment on a real estate loan, personal loan, credit card or small business loan.

Tel: 844-228-2872.

For more information and updates, visit BBVA’s coronavirus help page.

Capital One

Capital One provides assistance such as minimum payment, deferred loan, and fee suppression to eligible customers.

For more information and updates, visit Capital One’s coronavirus help page.

Chase

As of April 2, Chase is awaiting further guidance specific to the SBA Paycheck Protection Program available under the newly passed CARES Act.

For more information and updates, visit Chase’s coronavirus help page.

Citibank

Some mortgage customers may be eligible for hardship programs through Cenlar FSB, the bank’s service provider.

Tel: 855-839-6253.

For more information and updates, visit Citibank’s coronavirus help page.

Consumers Credit Union

Consumers’ Credit Union is offering members the opportunity to skip their next monthly qualified loan payment at no charge. For those who take advantage of this Skip-A-Pay option, the deferred payment will be added to the end of the current loan contract; specific terms are provided here.

Tel: 877.275.2228.

For more information and updates, visit Consumers Credit Union's coronavirus help page.

Discover

Discover customers who experience hardship as a result of the outbreak, and provides contact phone numbers for credit card, online banking, personal loan, home loan and student loan customers are encouraged to visit their online access for more information.

Tel: 800-347-7000.

For more information and updates, visit Discover’s coronavirus help page.

Fifth Third Bank

The available relief includes payment deferrals of up to 90 days with no late fees during the deferral period. Repossession activity on vehicles and foreclosure activity on homes is suspended for the next 60 days. Select banking fees also are being waived.

Tel: 866-601-6391.

For more information and updates, visit Fifth Third Bank’s coronavirus help page.

HSBC USA

For mortgage and home equity loans, available hardship assistance includes deferrals, reductions and late fee waivers; HSBC also will prevent negative credit reporting.

Tel: 866-949-2351

For more information and updates, visit HSBC's coronavirus help page.

Huntington

Banking customers with a financial hardship related to family illness or workplace closures due to COVID-19 can contact the bank for more information about its Consumer Payment Deferral Program, which offers a payment deferral for up to 90 days with no credit bureau impact.

For more information and updates, visit Huntington's coronavirus help page.

Marcus by Goldman Sachs

Marcus allows you to postpone making a payment on your loan for one month with no interest charged during the deferral and your loan term will be extended by one month.

Tel: 844-627-2876

For more information and updates, visit Marcus by Goldman Sachs’ coronavirus help page.

Navy Federal Credit Union

Navy Federal Credit Union provides assistance to its members 24/7 via its mobile app and online banking tools. Members can request a credit card limit increase, apply for a Pandemic Relief Loan or request mortgage loan forbearance. Overdraft protection, fee-free transfers and penalty-free certificate withdrawals also are being offered.

Tel: 800-336-3767

For more information, visit Navy Federal's coronavirus help page, including its pandemic relief FAQs.

PNC Bank

Customers are encouraged to contact the bank online to discuss hardship postponement of payments, for up to 90 days, on auto loans, unsecured installment loans or lines of credit, credit cards, mortgages, home equity loans or lines of credit and student loans.

Small business clients have access to a variety of programs that address loan, lines of credit, credit card and merchant services assistance. PNC also offers information relating to the Paycheck Protection Program created under the CARES Act that will serve as an extension of the SBA’s 7(a) loan program.

For more information and updates, visit PNC’s coronavirus help page.

Santander

Customer available relief options include temporary payment suspension, refunding late payment and overdraft fees, suspending mortgage and home equity line of credit foreclosures, waiving CD early withdrawal penalties and outgoing wire fees, and offering credit card limit increases.

Tel: 844-728-0999.

For more information and updates, visit Santander’s coronavirus help page.

State Employees’ Credit Union

Specific to loan assistance, SECU has programs for eligible members who may seek either a new loan or a payment extension on an existing SECU mortgage, auto, credit card or unsecured personal loan.

Tel: 888.732.8562

For more information and helpful links, visit SECU's coronavirus help page.

TD Bank

For customers who have a TD personal loan, auto loan, mortgage, home equity loan or line of credit, TD Fit Loan or TD Bank, N.A. Visa credit card, the bank can help with deferment of payments and waiving certain late payment fees.

Tel: 888-751-9000.

For more information and updates, visit TD Bank's coronavirus help page.

Truist

Truist website has been updated to include the option of applying online to defer payments on a credit card, personal loan, auto loan or home equity line of credit. Detailed information is available for its mortgage loan customers—both those with existing mortgages and those with loans in process.

Customers in need of assistance also can reach out to the following numbers:

• Heritage BB&T clients: 800-226-5228

• Heritage SunTrust clients: 877-820-2103

For more information and updates, visit Truist’s coronavirus help page.

U.S. Bank

U.S. Bank is offering reduced pricing on certain smaller personal loans and a Visa card with a 0% intro APR on purchases and balance transfer for 20 billing cycles.

Tel: 888-287-7817.

A separate section of the website addresses mortgage help and repayment options.

For small business customers, the bank has temporarily reduced rates on business loans and lines of credit and is temporarily waiving the fee for businesses to receive money digitally from their customers with Zelle.

For more information and updates, visit U.S. Bank’s coronavirus help page.

Wells Fargo

For homeowners, the bank is granting immediate three-month payment suspensions, which can be extended for up to six months, to mortgage customers who request assistance. Visit mortgages and home equity online.

For small business owners, a new page addresses the SBA Paycheck Protection Program.

Tel: 800-219-9739

For more information and updates, visit Wells Fargo’s coronavirus help page.

5. Look into refinancing your mortgage

If you are a homeowner, another positive thing out of this crisis is to take advantage of record-low mortgage rates. Of course, you’ll have to look at how it affects your whole financial picture and how far along you are in our current mortgage, but it’s something to look into if you are in the early years of your mortgage payments. See Freddie Mac website for current primary mortgage rates.

Although these are great tips to start off with, if you don’t already have a financial professional working with you, it would be a wise decision to hire a someone to help navigate through the more difficult calculations. Having a solid team of professionals of CPAs, estate planning attorneys, and Fee-Only financial advisors will prepare you better for any financial decisions you make for you and your family.

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