top of page

How to Manage Money in a Crisis

Updated: Aug 11, 2020

Whether your income is stable, you’ve lost your job or had your hours cut due to the COVID-19 crisis, you may have questions about how to manage money during this unstable time in our world. To help you along the way, we have put together some common questions and answers about what you should do to manage money well during a crisis:

What should I do if my income is stable?

  • Pay your bills on time

  • Make sure you have an emergency fund set aside

  • Keep paying off debt as fast as you can after your emergency fund is set

  • Use your stimulus money to accomplish your financial goals

What should I do if I lost my job or my pay was cut?

  • Temporarily stop paying off debt; just make the minimum payments if you can

  • Be sure to pay for your critical living needs first: food, shelter and transportation – in that order

  • Cut all unnecessary spending

  • Take advantage of local community programs that offer food and rent assistance

  • Let your bank and utilities know what is going on and ask what kind of relief programs they can offer

  • Look for a temporary job to get by right away (try an online or remote customer service job)

  • Use stimulus money to pay for essential needs (food/shelter) and save the rest

  • Save as much cash as you can with any remaining income you have

Should I file for unemployment?

Should I cash out my 401(k) or retirement account?

  • If at all possible, don’t take your 401(k)/retirement money out of the market unless you are facing a foreclosure or bankruptcy; early withdrawals are fined and taxed heavily by the government and you will lose much of the account’s value. However, if you have lost your job due to COVID, the normal 10 percent penalty is being waived. However, you will still owe taxes on it so that could be painful at tax time next year.

Should I take out a loan to survive?

  • Before you take out a loan, be sure to look for another job and/or file for unemployment first. You may also be able to sell some things or get creative and start a business to get by for a while.

  • If a loan is the only option, do not take out a pay-day loan due to the very high interest they charge

  • Avoid taking out a home equity loan because it could jeopardize your long-term equity and put you deeper in debt

Do I have to go back to work if my employer asks me to?

Should I wait for my old job to start back up or try to find a new job?

  • Keep looking for work even if you are getting unemployment; some industries may take a while to get back to normal so grab another good job while you can

  • Focus on finding a job in industries that are thriving or essential during this crisis (grocery store, delivery, online customer service and technology companies)

100 views0 comments

Recent Posts

See All


Select Federal Credit Union Logo


Routing number: 314088666

bottom of page