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Five Financial Steps to Take Immediately During a Crisis Like COVID-19

I have a background in business administration and an interest in frugal living and home projects.


These are trying times, especially for those who have lost their jobs or seen income reduced because of the COVID-19 crisis. You may feel a sense of hopelessness, or that there is nothing more that you can do to protect yourself financially. But there are many things you can do, in this crisis or others.

Step 1: Contact Your Mortgage Company or Landlord

Fortunately, there are resources available to many homeowners and renters who have recently suffered reduced income. Your home is your shelter during this storm and is definitely the first asset that you need to protect right now. Start by contacting your mortgage company and ask them about any special programs that they may be offering to defer or reduce monthly mortgage payments. Renters should contact their landlord sooner, rather than later, and inquire about any special programs they may be offering as a result of the Covid-19 crisis. The reason that you should call immediately rather than wait, is that some institutions may place a limit on the number of accounts on which they can forgive or delay payments. Being first in line for assistance programs such as these is always a good idea. In the case of mortgage companies, hold times are often long right now, but they may become even worse as the crisis unfolds and thousands more customers reach out. Use the mortgage company or landlord's call back feature if it is available to you.

In addition to special offers being offered by lenders and landlords, some cities and states are offering rental and mortgage assistance programs. Search the web using the terms "mortgage assistance" or "renter's assistance" along with the name of your state, and look specifically for government websites that contain the suffix ".gov" where you may be able to find links to helpful resources.

There are often many ways in which mortgage companies can work with homeowners, including delaying payments, using your home equity line of credit to make payments, or even by refinancing your mortgage in some cases. Interest rates continue to fall, and as a general rule of thumb it is advantageous to refinance when the new interest rate is around 2% lower than your current rate.

Step 2: Contact Your Automobile Finance Company

In addition to protecting your home from foreclosure, you should protect your transportation so that when a recovery happens, you have a way to get to your job. If you have an extra vehicle, boat or other watercraft, etc., consider selling it and place the money that you receive in your emergency fund. If you are having trouble making payments on your vehicle then you should contact your lender and see if they have any special programs available which may allow you to defer payments. With some lenders you may be able to extend the term of your loan, from an existing 36 month loan, for example, to a 60 month loan and reduce your monthly payments. As with home mortgage companies and landlords, it is in your best interest to act fast, since the finance companies may have set aside a limited amount of funds to help customers in your situation.

Step 3: Reduce Retirement Contributions and Consider a Withdrawal

If you are still receiving a paycheck, albeit a reduced one, now may not be the best time to be contributing the maximum to your retirement plans. Consider reducing or pausing automatic withdrawals to optional retirement plans, such as Vanguard and Fidelity, or work sponsored plans. Now is the time to take a close look at your pay stub and see what extra deductions that your employer is making and which of them that you can reduce or pause.

Withdrawing Money Without Penalty From IRA's

New legislation which was passed along with the $2 trillion dollar stimulus bill allows for penalty-free withdrawals from certain retirement plans, under the condition that that money is repaid within a specified period of time.

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) allows you to withdraw up to $100,000 from your eligible IRA account with no penalties for early withdrawal, as long as the funds are repaid within three years. You can find more about the new withdrawal rules, as well as info on the Economic Impact Payments being sent out to many taxpayers, at

Step 4: Reduce Or Eliminate Optional Services

Now is the time to make tough choices when it comes to the bills that you are still paying. Food, shelter, health insurance and transportation all come before entertainment. As essential as entertainment may seem while being required to stay at home, it is not a necessity. There are currently many free trial offers from streaming services such as HBO and Disney that can allow you up to three months of free programming. Now may be the time to cancel paid services such as Netflix, and choose other ones that offer free promotional offers until they expire. If you do accept a promotional offer, remember that in many cases they will require an active credit card, and may begin to bill you full price for services once the trial expires. Consider contacting providers such as Netflix and speaking to customer service about a reduced rate. You may save a few dollars by switching to SD from HD or UHD, or reducing the number of screens you can view programming on at the same time. Often if you ask to cancel at the beginning of the call, you will be transferred to the loyalty department, where an agent may offer you a promotional rate or a few months free to keep you as a customer.

Cancel Anything That Is Not Really Necessary

Now is the time to cancel magazine or online subscriptions, car wash club memberships, paid gaming apps, lawn care, or any other services that you could do yourself or do without. If you are paying a monthly subscription for your computer's antivirus, consider using a free or trial version of a competing brand. If you do not need enhanced data plans on your cell phone or home internet, consider reducing your plan to a cheaper one.

Step 5: Locate The Little Charges That Add Up

In almost every budget there are small overcharges that add up to big savings when they are found and eliminated. For example, if you are able to reduce your current cell phone plan to one of the special rate plans being offered to help customers during the Covid-19 crisis, you may be able to save quite a lot of money. I recently changed my own cell phone plan from AT&T postpaid to AT&T prepaid and saved $50 a month, while still keeping my same phone number. AT&T is offering a special $15 per month plan with 2 GB of data and unlimited calls to help affected customers. Several other major cell phone providers are also offering reduced rate plans for those affected by the crisis.

You might want to check your cable bill and see if there is any room to cut there. If you have your own wireless router, you may be able to save the $5 or more that many providers such as Spectrum charge customers for using their wireless router. Disconnect their router from the modem and use yours instead, and return theirs to a customer service center by mail if possible. If you are not a heavy data user, you may be able to reduce your data speed package, saving a few more bucks a month.

Comfort while staying at home is important, however high utility bills may result from being home more than usual. When using heat, set your thermostat low at night and use blankets. When using air conditioning try using ceiling fans and box fans to help reduce cooling costs by making the room seem cooler. This allows you to turn up the thermostat a bit, using less energy. Try opening your windows during cool mornings and allowing the cooler outside air to come inside, and then close the windows before it warms up outside, thereby trapping cool air inside and easing the burden on your air conditioner.

Take advantage of the time you have at home to call and request new quotes on items such as car and home insurance. In my own case, I was able to save an extra $50 by switching to a different home and auto insurance company, while still keeping the exact same coverage.

Finally, one of the key parts of your financial plan is to call a family meeting and discuss your goals with the entire family. Let them know how important it is to save money and ask them for their ideas on how to do so. You might be surprised to find how much your kids want to help, especially if you frame being thrifty as a kind of game that everyone is in on.

Final Thoughts

Every financial situation is different and there may be other steps that you should follow through on, besides the ones listed here.

Health Insurance

Health insurance is essential to your financial security. If you can afford to continue health insurance through COBRA or Continuation of Healthcare Coverage, do so immediately, even if you have to use retirement savings or loaned money to do so. An unexpected trip to the hospital could bankrupt you if you are uninsured. Visit your state's healthcare marketplace to see what options are available to you. Having lost a job counts as a qualifying life event in most cases. Visit for more information.

Economic Impact Payments

If you among the approximately 85% of eligible taxpayers, you should receive a "stimulus" or Economic Impact Payment from the IRS beginning in April. As of the date of this article's publication some payments have already been sent by direct deposit. The IRS is adding a tool to their website in mid April to allow you to check the status of your payment. You can visit the website for more info. Make sure that you dedicate that money to needs that are most pressing for your situation, such as food or essential utility payments.

Check the Closets

Another source of money for paying bills can be so sell things that you no longer need on sites such as eBay. and are sites where you can sell high end clothing and accessories. is a site that specializes in purchasing handbags. To avoid commissions charged by sites such as these, consider selling on Facebook Marketplace or Craigslist instead.

Don't Overlook Resources That May Be Available to You

Even if you are not employed in a traditional job that is covered by unemployment benefits, there may be payments available to you under the CARES act, or under state and local programs. Visit your state's workforce website and see if there are any programs that may benefit your unique situation. Also, don't hesitate to ask family or friends for help if you need it.

It's also crucial that you have a plan for when things return to normal. Prepare to resume monthly contributions to your retirement and emergency funds and try to stick with the good habits that you acquired during the crisis, such as thrifty shopping and reducing monthly bills. There are many helpful books out there which can help you save and budget your money wisely, including those by financial gurus Suze Orman and Dave Ramsey.

Last but not least, be sure to take care of your body and the health of your family. It is the single most important asset that you own. Avoid overindulging in food and alcohol and find a daily exercise routine that you can stick to. There are many free fitness programs available online, including Pilates, yoga, Tai chi, and more. Keep your mind agile by playing games and learning new things and make a schedule for each day to keep you on track.

Good luck and stay strong out there America!

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

© 2020 Nolen Hart


Dominique Cantin-Meaney from Montreal, Canada on May 05, 2020:

Definitely helpful tips! These are all things that we should keep in minds during this time.

Kyson Parks from San Diego, CA on April 25, 2020:

These are really helpful! Most people don't realize that they might be able to get a break on their mortgage or car loan, all you have to do is call and ask. Same with student loan payments, which are deferred right now.

Tamara Wilhite from Fort Worth, Texas on April 06, 2020:

And plan a budget so that when life gets back to normal, you can pay off debt and build an emergency fund.