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It's time to tap your emergency fund.
- Layoffs are mounting for American workers as the coronavirus pandemic continues to reshape daily life.
- If you've lost your job or been placed on unpaid leave as a result of the crisis, it doesn't always mean you're financially doomed.
- An emergency fund, unemployment insurance, or a new job can help get you through this uncertain time.
- Read more personal finance coverage.
Americans have been forced indoors to help stop the spread of the coronavirus, but only about 29% of US workers are able to work from home.
For millions of others, job layoffs are skyrocketing as "nonessential" businesses around the country - dine-in restaurants, theaters, concert venues, retails shops, salons, gyms, and more - close their doors indefinitely.
If you've recently been laid off or fear you may be soon, here are a few signs you'll probably be OK financially for a while.
1. You have an emergency fund
Regardless of the state of the economy, financial experts have long recommended keeping enough cash in a savings account to cover your expenses for as few as three months and up to one year.
Generally, experts say, your emergency fund should be equal to three months' worth of expenses, at minimum, if you split bills with a partner and you both work. If only one person earns an income, you should have six months worth of expenses saved, at minimum.
No one can predict how long this near-nationwide quarantine will last, or whether the businesses forced to close will rally when the crisis subsides. But if you have cash socked away - or a tax refund or other windfall that you can stash into savings as soon as you get it - you should be able to pay your essential bills for the next few months.
2. You qualify for unemployment insurance
US jobless claims more than quadrupled for the week ending March 14 - and they're expected to surge even higher as cities and states continue to enact coronavirus containment measures.
Qualifications for unemployment insurance vary by state, but experts say you should apply if your ability to earn an income has been impacted by this national crisis. You'll have to pay income taxes on any unemployment benefits you receive, but the cash can help keep you afloat for up to 26 weeks. How much you get can vary based on your past income and employment situation.
Even if you haven't completely been laid off, you may still be able to qualify for unemployment benefits. The US Department of Labor has issued guidance that gives states more flexibility in granting benefits to workers affected by the crisis, reported Business Insider's Katie Warren.
In short, the government agency is urging states to strongly consider three additional scenarios when granting benefits:
- An employer temporarily ceases operations due to COVID-19, preventing employees from coming to work
- An individual is quarantined with the expectation of returning to work after the quarantine is over
- An individual leaves employment due to a risk of exposure or infection or to care for a family member
3. You're able to earn additional income
If you're willing and able to find a new job, more than a dozen national companies whose operations are deemed essential are hiring hundreds of thousands of workers.
Retailers including Amazon, Walmart, Instacart, Papa John's, CVS, Kroger, Aldi, and PepsiCo are looking to fill positions immediately to help satisfy the increased demand for their products and services.
4. Your partner is still working
At this point, if your partner is working remotely or is employed by an "essential" consumer-facing business, like a grocery store, pharmacy, or hospital, chances are they will continue to be.
The economy likely won't shut down completely and there will always be demand for front-line workers. If you're used to a dual-earning household and your spouse is the only one bringing home a paycheck right now, work together to figure out how to best allocate the money. If it helps, act as if his or her job is uncertain and prepare accordingly.
5. You can cut unnecessary expenses
It's as good a time as any to take a close look at your monthly discretionary and non-discretionary expenses and make cuts where you can.
If you're out of work, the most important thing to do is make sure bills that are essential to your well-being - like rent, utilities, essential groceries, health insurance, etc. - are covered. That may mean pausing your streaming services, gym membership, or clothing subscription for the time being to free up some cash.
If you have credit-card payments or federal student-loan payments that would usually fall into the non-discretionary category, a quick call to your lender may help you get those payments suspended for the next few months. Some utility companies are also being generous, allowing residents to skip payments but keep their essential services, like water and internet, running.
Get the latest coronavirus news and updates on how COVID-19 impacts our daily lives and businesses.
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