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How to Deal with Financial Hardship Due to the Coronavirus

Woman Worried about COVID

Rule Number 1: Don’t panic and breathe deeply

COVID-19 has caused a lot of people to feel panic and fear about their financial situation and future. This panic and fear can lead to “poverty consciousness,” which is a set of beliefs that cause us to fear that we won’t have enough to survive. This mindset of fear doesn’t lead to good decisions. “So, how can I get past this?” you ask. Thoughtful reflection on the past and maintaining a sense of perspective for the larger picture will lead us through this episode.


Rule Number 2: Remember what history has taught us

Let’s look at history to give us some perspective on how we have recovered from crises in the past. As a society, we have survived World War II, the Great Depression, the oil embargo of the 70s, Black Monday, the tech bubble burst, the Y2K fear, and the 2008 financial crisis. What did they have in common? Higher unemployment, reduced spending, inflation, and mismanaged financial instruments like the stock market and banking deregulation. But what else did they have in common? Recovery!

COVID-19, the novel coronavirus, has ushered in some new twists on an old story. We’ve had to learn the difference between “physical distancing” and “social distancing” and we’re learning an important lesson on the old Boy Scout motto “Be Prepared.” Though we were woefully unprepared for this pandemic in terms of supplies and timing of lock downs, we can now take stock of the impact and recovery efforts we have available to each of us.


Rule Number 3: Maintain control despite uncertainty

First, let’s be honest about the impact this event has had on us and our money. Psychologically, we have experienced fear, anxiety, and stress over the uncertainty of how we will manage to survive on less money. How will we pay our bills? Our mortgage? Our rent? Our car payments and loans? Fear causes panic and anxiety but if we take a deep breath and look for solutions from a quiet mind, we will find the answers to these questions.

Fortunately, there are resources available to help us slow down and maintain the equilibrium we need to make wise choices.


Process your emotions in healthy ways

How can we process these strong emotions? We can practice things like light physical exercise, including stretching and yoga; meditation, which includes conscious breathing; mindfulness (naming things in the present space you’re in); and acknowledging that right now you are safe. Try listening to calming classical music while balancing your checkbook or working on your budget (more on budgeting later).


Assert control over your finances and your thoughts

It’s a fact that human nature, when we feel threatened, causes our brains to revert to a primal level as if we were in danger of being eaten by a saber-toothed tiger, when in fact tigers are no longer a daily threat. Maintaining a sense of control over what we can control is one means of reducing the fear of the imagined tiger. Here are some things you can try:

  • Nightly or bi-weekly, balance your checkbook and savings accounts. It helps to know where you are, financially, as long as you remember that all things are fluid and your current balance in no way reflects your value as a human being. As my father used to say, “It’s not your net worth that determines your value to the world. It’s your self-worth—your set of personal values—that really matters.” If you review your account balances with disciplined regularity, you will make better decisions because you will know what resources you have.
  • Monitoring expenses is another way to manage what we can control. I use an app called “Expenses Now” that creates neat little pie charts of every expense you allocate to certain categories. It helps to review your charts in the monthly and yearly views to see what percentage of your money is flowing to what categories. If your Starbucks or Dunkin Donuts spending under the “snacks” category is $40 a month, you may want to start having breakfast at home. How much do you spend a month on “dining out?” It is likely that that category has been reduced lately, due to COVID-19, unless you’re ordering out a couple of times a week.
  • Poverty consciousness has skyrocketed around the world since the pandemic broke out. Don’t fall prey to this unfortunate mindset. Instead, you can re-frame poverty consciousness into a more productive thought pattern by using the phrase “spending plan” vs. “budget.” The word “budget” has a connotation of managing with what little we have vs. “spending plan,” which looks at how much we do have and how we will choose to spend it. A spending plan allows us to assign some money to take care of ourselves without feeling guilty.


Ask for help

The next thing we want to do is to look for assistance when we need it. There is no shame in seeking assistance during a crisis, whether it is a personal or a societal crisis.

  • Auto loan relief: Try calling your automobile financing company and asking if they offer a skip-a-pay program or will allow you to defer a payment on your loan. Financing companies are aware of the current situation and most are willing to help.
  • Rental or mortgage relief: If you rent or make mortgage payments, call your landlord or financial institution and ask if you can defer the payment for a month or two. The federal government has stated that they will not force any evictions due to missed payments on Fannie Mae or Freddie Mac mortgages for a couple months.
  • Crisis relief: If you belong to a credit union, you may want to call and ask if they offer emergency loans. Some credit unions are offering 0% interest for a limited period during this crisis.
  • Personal and family crisis relief: Equally important, don’t hesitate to seek assistance from your local community. Church charity funds, food shelves, and fraternal organizations like the Elks, Lions, Eagles or Masons may be able to provide some assistance.
  • Unemployment relief: Also, if you haven’t already filed for unemployment, do so. Don’t waste your time waiting in line at the Department of Employment Training. The lines are too long right now. Use a computer and file online. It’s fairly quick and easy.


I’ve saved the most important subject for last—the Importance of Communication. This is the single most important feature of surviving any economic shortage. Don’t be afraid to call your lenders, your utility companies, and your support network of friends, family, fraternal groups, therapists, etc. Now more than ever—especially with physical distancing—we need each other. We need to cry, laugh, share our fears, and provide comfort to one another.

In summary, we have reason for faith in humanity and its ability to recover from some pretty dire circumstances. Look at our history. We’ve been through some very tough times and always emerged stronger. Humanity is resilient. Show compassion for those less fortunate (there are always those less fortunate than you). Practice gratitude to ward off poverty consciousness. Notice and acknowledge the good in others. Sometimes crisis brings out the best in all of us.


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Bradley Carleton

About Bradley Carleton

Bradley Carleton is a branch sales consultant with VSECU and has been an outdoor guide and writer for 28 years. He lives in Charlotte, VT on a farm with his wife and a menagerie of pets. Other than finance, his greatest passions are his wife and traditional outdoor sports.
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