The whole world was turned upside down by the coronavirus pandemic. Hospitals and frontliners are overwhelmed by the number of patients. Some countries have implemented lockdowns to prevent the virus from spreading more than it already has the past few months. Australia joined other countries in fighting the virus through social isolation. Although staying at home is the best way to help fight the spread of the virus, it is not an ideal scenario for people who have bad credit, loans to pay, no cash on hand, or no savings.
The Coronavirus Pandemic and the Economy
The economy and many businesses have taken a rather critical blow from the effects of the coronavirus pandemic and the lockdown restrictions. Many Australians are now unemployed amidst this global crisis and one-quarter more fear that they will lose their jobs. People who have savings or have access to money may be able to get through the lockdown and see it as an opportunity to take a break, unwind, and reconnect with family. Unfortunately, not everyone has enough savings to cover their essentials and other expenses during the lockdown.
The fact that the coronavirus is still flooding the media and social media news feeds is not a comforting thought, however, it is wise to stay informed so that you can prepare for it in all aspects including financials.
Tips for People with Bad Credit, Loans to pay, or No Savings
COVID-19 is not the first virus to cause this much damage to people’s lives across the globe, if the world recovered back then, it will recover now. Apart from keeping you and your family safe, you should also think about the precautions you can take to manage financial risks.
Here are some things that you can do to manage your finances during a global crisis:
Review Your Budget.
It is time to get your finances organised– whether you are working from home, unemployed or temporarily unable to work due to lockdown restrictions– it’s your chance to learn all about budgeting. You can do this the old fashion way and write your budget down on paper or you can learn how to use some technology and play around some spreadsheets.
If you have bad credits, loans to pay or no savings– then you need this more than ever. Write down your income (if you still have some money coming in) or how much money you do have on hand. The next thing you should do is to break your expenses down and see if you can cut some things off for the meantime. You want to make your savings last for a long time.
Be Mindful of Your Utilities.
Some people tend to forget to turn the lights off when they leave the room and some people take water for granted– if you are one of these people, then you need to break the bad habit. You should be mindful of these “little” things as they can help you save a lot of money on your bills. Try to be smart with the usage of water, gas and electricity.
Maybe you don’t need to take a bubble bath three times a week (maybe a quick but thorough shower will do) and maybe you don’t need all your lights to be on in the whole house all the time.
Look for Home-Based Jobs.
This option may not be available to every industry, but you can always pick up a new skill. Sometimes you need to find ways, especially when you’re unemployed with a bad credit loan and a few other bills to pay.
Review and Evaluate Plans and Subscriptions
There are some plans or subscriptions that you can consider as a necessity, like your internet, insurance, etc. However, during a global crisis, you need to reconsider, evaluate and renegotiate some of these services. Check if you can update, downgrade or completely cut out one of your subscriptions or plans. For example, do you really need a premium Spotify account right now? If you have wifi at home and you listen to your liked music in shuffle anyway– you won’t miss your premium subscription.
You can also evaluate if your current internet plan is still up-to-date with your needs or maybe they have a more practical plan for you to update to. Checking this sort of detail can help you save some money to repay some bad credit loans or save money for essentials like food.
Money Talk with Family Members.
The family has to stick together during a global crisis. You should include your family in discussing financial situations and risks. You may also want to discuss this matter with the kids (if you have any). Each member of the family should understand that it is best that everyone makes practical decisions and focuses on the essentials like your bad credit loan repayments, bills, etc.
Financial Risks of the Coronavirus Pandemic
People have needs, and despite the health risks of the coronavirus– people will not stop having those needs. People have to buy food, pay bills, take care of insurance, etc. The pandemic and the lockdown restrictions only made these needs harder to obtain.
Some people are laid off from work due to the effects of the pandemic to the economy. Some people simply have too much on their plate to start with so the effect of the virus is just another giant hurdle for them to face. Either way, people who are unemployed or possibly burdened with bad credit due to poor financial health will further suffer amidst the lockdown.
Options to Getting Fast Cash During a Global Crisis
The first thing that comes to mind when people need cash is borrowing money from banks and other loan service providers. Most lenders like to make sure that they will get their money back– so it is extra difficult when you are unemployed or if you have bad credit records.
Here are some options that you can try when you’re running out of ideas and you need fast cash:
Ask Your Friends or Family
They say that you should not mix debt and family or friends, but this is only true when one of you has a record of not paying what they owe. Asking for financial help may be uncomfortable and embarrassing but during these difficult times, they can’t blame you for asking for assistance. Since they are close to you, chances are high that they will offer a flexible repayment schedule and low to zero interest.
Just make sure not to abuse their kindness. Stick to your agreement. Do not make them regret helping you. Make sure that you communicate well with them regarding your repayments. Things can get complicated if you break the trust of your family or friends.
Sell Some of Your Things
If asking your friends or family does not work out, you can try selling or pawning some of your belongings. You can sell or pawn your phones, some pieces of jewellery, and other valuable things.
Selling your things is a permanent decision, but it can get you quick cash once you find a buyer. However, if you are not ready to commit to selling your valuables, you can pawn them instead. You will get your things back once you pay the money back to the pawnshop/
Cash Advance On Credit Card
If you have a low outstanding balance on your credit card, you can take a cash advance out of it. It is a good option if you need an emergency fund.
Don’t have a credit card and you have a bad credit score? You still have options, you can apply for a secured credit card, but don’t get your hopes too high. There is no guarantee that the bank will approve your application. On top of that, secure credit cards require a cash deposit to set your credit limit, putting you right back where you started.
Look For Bad Credit Loans Provider
A bad credit loans provider is the last option. They may also be your last resort. This kind of lender does not care about your bad credit history, although you need to understand that their offers will be different from traditional loan providers. Their interest rate will be higher for sure.
Make sure to research and compare before signing anything. You can even find fast loan providers online. Just be sure that you understand the terms and conditions of your contract to avoid any issues moving forward.
Conclusion
Running out of funds can happen to anyone – it’s inevitable. However, experiencing financial issues during the pandemic can be extra stressful. Keep in mind that before you dive into a money lender, be sure to check their credibility and license. It’s paramount that you understand the fine print of your quick cash loans with bad credit applications prior to signing it.
Just a quick reminder, though. The best way to deal with emergency expenses is to already have money set aside. Be more efficient in handling your budget in order to save money for future purposes.
The opinions expressed in the Blog are for general informational and entertainment purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific investment product. It is only intended to provide education about the financial industry. The views reflected in the commentary are subject to change at any time without notice.