Ever read those articles that offer suggestions on cutting down costs or savings, and it’s just not helpful? It’s usually general and non-specific. Well, here are my actually useful, more specific suggestions and I truly hope that it does help in cutting down costs during this pandemic. Do keep in mind, some of these will be more applicable if you are low-income (e.g. savings on electric bills), or if you lost your job due to COVID-19, however most are for everyone just looking to stay alert and prepared as the job market and economy continues to change.
I’m breaking this post down into two categories. The first part is ways you can save right now, and the second part is what you can do now during quarantine to prep so that when everything is hopefully back to “normal” you can begin or continue the savings then.
Savings Right Now:
1. Car insurance: I called my car insurance a few weeks ago (Geico) and told them that we are not using both of our cars last and this month, and would like to put one in “dormant” status. They were happy to do that while keeping our full coverage and no notification to the DMV, and our bill was decreased by $138 going forward until we resume using both cars on a regular basis. In addition, most car insurances are automatically offering a certain percentage off due to lower driving rates across the country. Geico is offering 15% off automatically. And this makes sense because less people are on the road and hence less accidents occurring. So it’s win-win for everyone.
2. Rent: If you lost your job due to COVID-19 and renting, first call your landlord to ask if there is any flexibility with rent payment, including if you offer to extend your lease. If that doesn’t help, look up your city/state rules on rent during this time, since many cities and states have executive orders preventing eviction. In CA, Governor Gavin Newsom signed an executive order banning the enforcement of eviction orders for renters affected by COVID-19 through May 31, 2020.
3. Mortgages: This one is tricky. Many mortgage companies are offering forbearance for 3 months but each has their own policy that should be read. Unfortunately, many are being predatory and letting you pause payments for 3 months, but then expect you to pay all 3 months right after, plus interest, which is just a bad idea to me. Look into refinance options if there are no good forbearance options since rates have been great (some as low as 2-3%) for the last few months.
4. Car loan payment: Many companies are offering a 3 month grace period, but nothing super helpful and of course this loan will need to be repaid any way you look at it. Since these payments are much smaller (than rent/mortgage), it doesn’t have many options.
5. Credit cards: I haven't read anything from credit card companies allowing people to delay payments without a penalty, but call them directly to see if there are any options available. This is an area I don’t know much about because I never carry credit card debt (my mom instilled too much fear of it) but I know many people have this debt, so it’s always worth your while to call and check.
6. Student loans: From my understanding, the CARES act mainly helps those on PSLF; you get 6 free months of payment and it will be counted towards your 120 qualifying payments. For everyone else with federal loans (does not apply to private loans), your loan payment and interest for the next 6 months will be paused, but not forgiven, so your principal will still remain the same after the 6 months. So it certainly helps if you are unable to make payments right now, but you are still back to where you are now after the 6 months.
7. Cellphone: Call your cellphone company to ask if they have any ongoing offers due to COVID-19. Many carriers are offering discounts to healthcare providers (according to some HCWs AT&T is offering some free months).
8. Utility/Gas: Check to see if there is any flexibility on payments or discounted rates. For example, PG&E in California is offering reduced rates during this time. On their website they state: “if you have recently lost your job, even if you are receiving unemployment benefits, you may qualify for a reduced energy rate through our CARE or FERA programs.”
9. Subscriptions: This one is obvious but worth visiting. Cancel any subscriptions that you are not using (cable, Netflix etc.); or better yet choose and pay for one at a time. If you are watching a lot of Netflix, go through Netflix first, then cancel and then sign up for Hulu or Disney+ next. You don’t need all 3 or 4 at the same time; portion control! :)
10. Books: Read e-books from your local library instead of buying them on Amazon. Amazon also has a trial period for kindle unlimited, so now is a good time to use the trial and catch up on reading. Just remember to cancel if you don’t plan on reading more books past the trial. **Remember to mark in your calendar when a subscription ends. Super important.
11. Healthcare workers: Wills are free for HCWs through Trust&Will (and the living trust is $129 off). Here is my full run-down on everything about wills and estate planning, and what the difference is. In addition, here are two FULL comprehensive lists of things being offered for free or discounted for frontline healthcare workers. Here on Average Socialite and on Health Job.
12. Help For Small businesses: In addition to the government stimulus package, including the PPP program, EIDL and such (here’s a good rundown of the programs if you scroll down from a CFO), many companies are offering grants to business owners; check out the comprehensive list on Alice. Many of the government stimulus programs have run out of money, but according to sources, they plan on replenishing the funds.
13. Stimulus Payment and Unemployment Benefits: In the 2.2T government stimulus package, in addition to a payment of $1,200 (plus $500 per child) given to all qualifying individuals, unemployment benefits will pay $40-450/week (in CA; may vary with state) and will be providing an additional $600/week for up to 4 months due to the pandemic. This is also the first time independent contractors can apply for UI benefits. Payments: If your basic needs are taken care of and this money will be extra, put it towards any high interest debt (anything more than 5%). Go through this list I made of where you can park that money so it will give you the best returns in the long run. Remember, when the stock market is down, that means it's on sale, and it will go back up and give you great returns.
14. Memberships: Go through your credit card statements and cancel anything that you are not using; this includes gym memberships, zoo memberships, yoga studios, dating apps, etc. Also, if you have unused gift cards, unused Groupons etc, this might be a good time to use them online and cut costs.
15. Free food: There are numerous local food banks, schools and churches/religious institutions offering free food; ask (call) around local community groups, check out Nextdoor to find locations these are being offered. A lot of lower-income areas have big community centers that help those in need.
16. Emergency fund: If you have this fund as advised, this is the time to use it. I do understand that it can be stressful to actually use the emergency fund because it adds additional fear of running out of the emergency fund itself, but this is the main reason to save for it. Use any and all additional savings/preparation so that this fund lasts you during this crisis. The goal is to keep yourself afloat until hopefully things go back to “normal” after which you can focus on quickly filling this fund back back up again.
17. Groceries: Remember to follow your normal grocery plans (make a list, buy generic, don’t shop when you are hungry etc) and not get intimidated by the “shortage” - almost all groceries are stocked (thank you all frontline workers!), so you can still buy whatever you normally would or in bulk, and it’s a great time to cook at home. Tip: remember, make your freezer your BFF. You can cook large quantities in one go, eat half, and freeze the rest. And enjoy the saved frozen food in 3-4 weeks when you are looking for something new.
Part 2 is continued in the second post!