The number of Coronavirus cases in the United States has surged in the past weeks. States around the country have closed schools and many companies are initiating work from home protocols for their employees. But what happens when staying home isn’t covered by your company’s sick leave policy or Congress’ new Coronavirus bill? Should families be spending hundreds of dollars to stock up? And what should they do about their mounting bills during this tumultuous time?
The novel coronavirus has created financial uncertainty and we’re here to talk about it. We reached out to financial experts for their advice on how to manage financially in the midst of the COVID-19 outbreak and beyond.
No sick leave? Negotiate first.
Fo Alexander, a Certified Financial Educator Instructor at MamaandMoney.com suggests you start up a conversation with your employer. “Individuals without sick leave, but impacted by COVID-19 should begin by talking with their HR department. Companies may allow employees to use PTO (paid time off) or work from home where possible.”
If you’re nervous about the negotiation process, Tori Dunlap, a financial expert, and Founder of Her First 100k has some tips: “Focus on the facts about how you can still be productive working from home (probably more productive) as well as the risks of commuting, and how it will add value to the company while keeping you safe at home,” Dunlap shares.
If you can’t negotiate any sick leave, PTO, or work from home options, Alexander suggests you ask about paid medical leave, which could cover COVID-19. This is a new virus, so you should be specific about what this paid medical leave could cover when you talk to your employer.
If you need to care for a family member Alexander shared: “Taking care of a sick, immediate family member is covered by FMLA. So if you are worried about maintaining employment during your absence, this may be an option– although it may be unpaid.”
The hard reality of no paid options
Dr. Maura Mills, a professor of Management at the University of Alabama and behavior expert shares the difficulty workers will face amidst the COVID-19 crisis. “Unfortunately, many workers in jobs without paid sick leave tend to be lower-paid workers to begin with, so they’re more likely to be in a precarious financial position already.”
Per Dr. Mills: “This makes an already difficult situation even more challenging, as in turn [people are] less likely to have an excess of financial reserves from which to draw to maintain their household and basic lifestyle needs during a quarantine. It’s also the case that most lower-paid and so-called blue-collar jobs cannot be performed from home, so the very employees who are most in need of continuing to work and receive pay are the least likely to be able to do so – and may even be at risk of losing their jobs as a result.”
It’s a somber reality for many in the midst of this public health crisis. Our financial experts have some suggestions for anyone who is forced to take unpaid leave from a job.
If you have no paid options, you’ll need some reserves
Whether you need to care for your kids or have a compromised immune system staying home might be a necessity, even if you need to take an unpaid option.
Alexander says “Tapping into a savings account or emergency fund would certainly be justified under these conditions. To reduce the financial impact, immediately begin reducing expenses and discretionary spending where possible.” If you don’t have savings, start one now while you still have a paycheck coming in.
Dunlap says you need to “Stick to your bare necessities if money is tight — get creative with food you already have, don’t use time spent cooped up buying a bunch of stuff online.”
How to combat the loss of income
Financial hardship due to COVID-19 may be in your future, but you can try to combat the loss of income.
“The key is to be proactive and have a plan in place that can be immediately executed if needed,” Alexander states “You should also contact your service providers and creditors to discuss options for modified payments due to your possible loss of income.”
Dunlap suggests you start looking at alternative ways to bring in some money “This is actually a perfect time to start diversifying your income,” she says. ” Find an online freelance gig to give you some financial freedom and stability.”
What two women are doing with their finances in the epicenter of the COVID-19 outbreak
Linsay VanSomeren lives on 124th street in Kirkland Washington, right on the most direct route between the Life Care Nursing home and the hospital that houses all the COVID-19 cases. VanSomermen says she has been hearing sirens go by for days.
Thankfully, she is a freelance writer and already works from home. Her husband is a software engineer and takes a crowded bus into Bellevue Washington every day for work. VanSomermen shares that he has been at home after his work closed the office to all non-essential workers.
“Luckily we have a healthy emergency fund (just over $10,000), good health insurance, and we have enough money in our budget so that we’ve been able to afford extra food in case we’re quarantined. We expect we’ll both get COVID19 sooner or later, given where we live,” VanSomermen states.
She says preparing for COVID- 19 wasn’t cheap but thanks to major financial changes made over the past few years they are in a good place. “We’re both incredibly thankful that we’re in a place where we have enough income and savings to afford this big change, and that both of us can work from home. It hasn’t always been that way. We’ve both had laborer-type jobs in the past, and have lived paycheck to paycheck. I’m especially thankful we’ve broken past that cycle when it comes to times like these.”
Heather Albrecht is a part-time financial coach and a full-time self-employed housecleaner in Vermont. She has clients near Dartmouth College in Hanover, New Hampshire one of the COVID-19 major outbreak areas.
Albrecht says she is trying to figure out what to do about her business. “There aren’t any guidelines that I’ve been able to find about how I should handle potentially ill clients or clients traveling,” she shares. In the meantime, Albrecht has her finances in order, stating “This isn’t the first time I’ve been afraid of the consequences of losing my income, so I have a mental plan in place.”
“I operate my business finances very conservatively and have always kept a healthy emergency fund just to pay myself a paycheck. I keep my business and personal funds separate and pay myself just like anybody who works a W-2 job with a salary. I hope to be able to ride out any self-isolation storms just fine,” Albrecht shares. Her husband is also able to work from home so they will have his paycheck coming in even if she can’t see clients.
For accurate data regarding the virus check with the Center for Disease Control (CDC). There you can find information about symptoms, steps to prevent the illness, and situation updates. You can also check with the Operational Health and Safety Administration (OSHA) for information regarding COVID-19 exposure and workplace regulations.
Bethany McCamish is a personal finance writer and the founder of His & Her Fi.
Feature Image: Twenty20