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Drastic Steps for Making Ends Meet During a Pandemic

Proven moves to slash your spending and raise cash quickly

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Desperate times like these call for desperate measures. If work, health or family disruptions due to the coronavirus pandemic have you struggling to make ends meet, you may need to make some major changes to your finances. But what actions can really make a difference? Consider these, which have worked for others and can save you large amounts of money, either temporarily or permanently.

Right away

Start working the phones. Focus first on creditors — your mortgage provider, credit card companies or medical debt holder. “Ask them, do you have the option to be on a payment plan or on a reduced interest rate?” says Rebecca Johnson, manager of the Pittsburgh Financial Empowerment Center. Often, creditors are willing to help you out, but first you have to be willing to call and ask these questions.

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Explain your financial situation to your lenders. “Always be up-front about what your hardship is,” says Luke Crumbaker, program manager for the Greenville County, South Carolina, Financial Empowerment Centers. “Especially right now, cite COVID-19 as the cause of the hardship to unlock special options they're developing. Being open about your finances and asking for help will work wonders.” It's much better to make this call before you miss any payments. Some creditors are offering special deals because of coronavirus challenges and waiving interest for the next few months, while others are just tacking it on to the end. Credit counselors are helping people navigate these special programs and triage their debt payments based on each lender's current rules, says Bruce McClary of the National Foundation for Credit Counseling. You can find a credit counselor in your area through or by calling 800-388-2227.

Call utilities and cellphone providers. Your next wave of calls should be to those providing important ongoing services. For example, ask your cellphone provider, cable company, utilities and insurer about extra ways to save (or shop around for a better deal).

It can also help to let them know that you're willing to cancel the service if you don't get a better deal. “If you have an annual contract for cable or internet, you can typically get a newer promo rate even if you're an existing customer,” says Crumbaker.

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Talk to your insurance agent. Several auto insurers are giving customers a rebate because they're driving less, and you may qualify for an even bigger discount if you sign up for a data-tracking service, such as Progressive's Snapshot, State Farm's Drive Safe & Save, and Allstate's DriveWise. The company that offered the best rate in the past may no longer have the best deal after your life changes. Let your current insurer know that you're shopping around, says Ana Gonzalez Ribeiro, an accredited financial counselor in the Bronx, New York. “If you're a long-time customer, they'll be more open to helping you out with discounts,” she says.

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Cancel some subscriptions. Write down every membership, streaming service and digital app that you pay for on a monthly or annual basis. Check your credit card bill for ones you might have forgotten about. Then ask yourself: Can you make do without access to all the TV, music, games, news, classes, security services and such you are paying for? Keep those you use frequently and truly enjoy or rely on, of course. But if their value is just marginal, let them go. “You'd be surprised by how much it adds up once you start cutting down on those smaller expenses,” says Ribeiro.

Do a deep dive into your spending. A careful review of your credit card statements might show a surprising number of monthly restaurant or bar charges, or how frequently you shop for pleasure, or the real cost of your knitting or woodworking hobby. “Many of my clients are calling me to say they're saving more money now,” says Sara Carter, a financial counselor with the Greenville County, South Carolina, Financial Empowerment Centers. “They can't go to the mall and restaurants, and they have more money as a result of staying home.”

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This month

Sell an expensive car. “Transportation costs are a prime area to cut back and save,” says Richard Ward, a Pittsburgh certified public accountant and member of the American Institute of CPAs Financial Literacy Commission. Going from a two-car to a one-car household can save money on insurance, maintenance and gas, as can replacing an expensive car with a cheaper vehicle. Mari Adam, a certified financial planner in Boca Raton, Florida, has worked with clients to lower their automotive spending; you can save hundreds of dollars each month, she says, by trading in cars for lower-cost vehicles. Contact the dealer or lender and ask about your options. “Some dealers and brands reward loyalty, and they may want to keep you in the ‘family’ so when times are better, you may be willing to trade up again,” she says. “Make sure to do this while your credit is still good. If you miss payments and your credit score drops, they may not be willing to work with you."

Refinance your home and car loans. With today's low interest rates, you may be able to refinance your mortgage and reduce your payments significantly. But closing costs and other fees can run from 2 percent to 5 percent of the loan's value, so you need to make sure your savings make the refinancing costs worthwhile. A refinancing calculator at the American Institute of CPAs site can help you assess fees and savings.

Rent out a room in your house. If cutting back on spending isn't enough, one of the quickest ways to generate regular income is to bring in a boarder. Carter has several clients who charge $500 to $600 per month per room. “It is a nice way to bring in additional income while providing safe, affordable housing for people who need it,” she says. The homeowners generally have tenants complete an application and write up a renter's contract agreement, and some even ask for a credit report history and a renter's history, says Carter. Find out about the tenants’ rights laws in your state.

For the future

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Once you stabilize your finances, it's a good moment to ponder the “elephant in the room” question: Is living where you now live still viable for the long term? Costs vary considerably based on geography. A $4,000-a-month lifestyle in one city could cost $2,000 a month a mere 100 miles away — a fact that people who have lived in one locale for decades sometimes forget. “You can make a very significant reduction in the cost of living, especially if you move to a smaller house, too,” Adam says. With that in mind, consider these options:

Moving to a less-expensive area. Several of Adam's clients have moved from pricey South Florida to lower-cost areas such as Jacksonville, Orlando and other parts of central Florida, or to North Carolina and Tennessee. “Housing can be almost half of what you're paying here, and everything's cheaper,” she says.

Downsizing your home. Moving to a smaller place in your neighborhood probably won't net you as much as you'd get moving to a cheaper area but can still pay off. “You can save thousands of dollars a year, and it can also lead to a more carefree lifestyle,” Adam says. You'll spend less on property taxes and insurance, and can sell furniture you don't need for extra cash. You could end up selling a car, too. Or you can sell your house and rent at least temporarily, eliminating property taxes and paying only low renters’ insurance premiums.

Living with your kids and grandkids. “We're seeing more families with three generations living together,” says Karen Wagner, a financial counselor with the Pittsburgh Financial Empowerment Center. Adult children who move back home can help share expenses, or parents can move in with adult children. When adult children's jobs are at risk, a parent's guaranteed income from Social Security can be especially helpful. “They have a stable income and they can help their children meet the rent or mortgage,” Wagner says. Grandparents can provide child care and even help their grandkids learn at home while they're out of school, she says.

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