The coronavirus isn’t over yet, and it may not be for a while, but businesses and families in Philadelphia and across the nation are starting to see the light at the end of the tunnel. Non-essential businesses are reopening their doors, most people are returning to work, and the economy is no longer in a downward spiral. At Quality Credit Repair, we think the best road to financial and credit restoration is by getting an early start. Consider these tips below.
Review the Numbers
You’re not alone if the coronavirus pandemic sabotaged your financial stability. At their peak, unemployment rates rose to a record high of 14.7% as millions of Americans were laid off due to temporary business closures. Whether or not you were part of this group, it’s safe to say that your financial situation was affected either way.
Now that businesses are opening back up, it’s time to review and rework your budget (once again).
Take a look at your income and your expenses. Are your bills and debt payments covered, or will you need to rearrange your budget? Reduce spending wherever possible by avoiding outdoor dining and entertainment, as tempting as they may be after a few months in self-isolation. This may be the right time to think about some lifestyle changes as well. Are there any unnecessary expenses you can eliminate now and forever?
Prioritize Debt Payments
Hopefully, you took advantage of the temporary debt relief programs that many companies and government institutions made available for the time being. However, those programs are set to expire soon, if they haven’t already. Now it’s time to prioritize debt payments, so you can slowly pay off what you owe and improve your credit score.
If you borrowed any money during the pandemic, you’ll want to pay that back as quickly as possible, so you’re not stuck with even more debt down the road. Then, figure out a payment plan for the rest.
The two schools of thought on debt repayments are called “debt snowball” and “debt avalanche.” Debt snowball focuses on paying off the smaller balances first, so you can get it out of the way quickly. Debt avalanche is the opposite; you focus on paying off the high-interest debt first, so you can save more in the long run. Take a look at your debt and decide which would be more beneficial to you.
Rebuild Your Emergency Fund
Emergency funds are a great way to protect yourself from financial devastation during a time of crisis. COVID-19 had almost everyone dipping into their emergency funds to make ends meet. If or when your financial situation improves, rebuilding your emergency fund should be a priority.
You don’t have to devote every last cent of your paycheck to this endeavor, but you should aim to grow it little by little. Perhaps you save a hundred dollars this week, but only ten dollars next week. That’s okay! Every penny counts! The important thing is that you have savings ready to use in case of a rainy day.
For more help or the best credit repair services, reach out to Quality Credit Repair today!