By now it’s no secret that workers within the service industry have been severely impacted due to the novel coronavirus, but as things slowly return to normal some of these workers have a financial mess to clean up. We heard about Ericka, a waitress at a popular Miami restaurant that was among one of the many individuals who was furloughed due to quarantine.
Financial Impacts of Being Furloughed During Quarantine
Ericka’s restaurant had to close during quarantine due to the inability to keep the business profitable and because the owners wanted to follow strict social distancing guidelines. During this time, she was furloughed, which left her with very little income. Due to her loss of income she unfortunately had to take on some debt she was not prepared for.
The main debt Ericka took on while being furloughed was credit card debt and as more and more places begin to open back up, her restaurant is included. Now that she has income, coming back in she wants to focus on paying down the debt she incurred over the last few weeks.
Steps Ericka Has Made to Recover After Job Loss
Knowing she has a mountain of credit card debt to tackle, Ericka was desperate to find ways to start the process of paying it down. One of her friends, who also suffers from a lot of credit card debt suggested she check out Get Beyond Money, as the community has helped her pay off her own debt as well. So, Ericka took her friend’s advice and joined the Get Beyond Community, since then she has taken the following steps to recover after her temporary job loss:
Budgeting Monthly Bills
The first thing that ran through Ericka’s mind was how she was going to afford her monthly bills while paying back some of the debt she incurred. She downloaded Get Beyond Money’s Budget Planner and explored how other community members were creating a budget using the planner as well. From there she made a plan to temporarily suspend all unnecessary monthly expenses such as streaming services and start by prioritizing her most important expenses first, such as rent, utilities, car payment and phone bill. Since student loan payments have been suspended, she did decide to hold off on paying that to free up extra funds to put towards paying down credit cards.
Switch to a Debit Account
Ericka was talking with community members and was introduced to the fact that some bank accounts charge up to $14 a month for a service fee. Since she was not having her normal direct deposit amount deposited into her account, she decided to check out her statement to see if she was in fact being charged a pesky monthly account fee. She took the advice of community members and switched over to the Daily Rewards Debit account from Tropical Financial so she could earn cash back every time she made a debit card purchase and because there was no monthly fee. Instead of spending money, she now is earning it when making essential purchases.
Refinanced Her Auto Loan
The most interesting thing Ericka was able to do in order to save money monthly was refinance her auto loan. She read about another GBM community member, refinancing their auto loan and being able to save on the rate and monthly payment. With the freed up cash, Ericka was able to allocate the extra funds to those pesky credit cards.
Get Beyond Money has helped Ericka take the necessary steps she needed to recover from her temporary job loss, but also help her to understand that the simplest of things can help her save money month to month. If you’re recovering from a furlough, try out these tips.