Author: Alex Delaney
You are not alone. The Covid-19 pandemic has rocked our world to the core. But you don’t have to wait for everything to fall apart. There are steps you can take to keep your credit in good shape, or at least keep it from bottoming out.
1) Determine your budget. We are in crisis. Your first priority should be to take care of your immediate needs, then prioritize your budget. Immediate needs are generally recognized as
- Food and Medicines
- Car payments
- Credit cards
2) Figure out how much you can pay now toward each bill, and how much you can pay weekly, or biweekly.
3) Contact your creditors. Be it your landlord, your utilities, your car payment or credit card, staying in touch and keeping them informed goes a long way to keeping the relationship on a positive note. Let them know what your budget allows now, and what they can expect from you. Negotiate a payment plan, knowing what you can afford. Everyone is aware of the current crisis and many companies are operating on an emergency basis with plans to work with debtors.
4) For creditors, call and ask for their hardship department. You may be able to negotiate a payment plan, or be eligible for incentives. Ask about concessions and determine all the ones you may be eligible for.
5) Now that you have your plan in place, look for ways to reduce the outgo of your funds. Many utility companies offer online information on reducing costs.
Reduce utility costs. Georgia Power makes the following recommendations:
- Make sure vents and registers aren’t covered by furniture, rugs, curtains, or other items.
- Change your furnace filters regularly. This keeps the system functioning efficiently, lowering your utility bills.
- Use your stovetop over your oven whenever possible to reduce costs. Match pots and pans to burner sizes to maximize the use of heat. Using lids will minimize heat loss, also reducing costs.
- Turn off all electronics when not in use, such as TVs, computers and other electronic devices.
- Make sure toilets are not running.
- Check your water heater regularly for leaks.
- LED bulbs are expensive, but save money in the long run. Consider getting a package and replacing hard to reach lights or frequently used lights. This will cut down on the need to change bulbs in addition to saving money.
- When doing laundry, avoid using hot water. Use warm or cold water and rinse in cold. And avoid overusing detergent as this makes your machine work harder.
Food and Medicine:
- Shop around online. Many pharmacies offer discount cards and varying rates for medicines. Check into discount cards. Check your prescriptions and go to their direct website. Many companies have significant discount coupons that you can print and take to your pharmacy. These can save you hundreds.
- Check online weekly ads for the best pricing. But remember, driving store to store not only puts you at more risk, but it also costs in gas and time. So determine the store that offers the best discounts for what you need.
- Buy in bulk if your family size and budget allows. Items like family pack hamburger can be divided into freezer bags.
Call your credit card company and ask for a reduced interest rate. While your priority should be food, housing and utilities, you still need to make sure your credit balance is going down. While it may not be possible, try to pay at least a little over the minimum payment so your debt load doesn’t increase.
This may be the time to consolidate your bills. But be aware of scams and make sure you are talking to a legitimate credit consolidation company.
This pandemic is affecting many families and their financial picture. Check back regularly. As things improve, we will be taking a look at credit repair strategies. We also want to hear from you. Please send your money saving strategies to email@example.com so we can share them with other tenants. We want you, our tenant, to succeed. We are all in this together.