In other words, almost everyone, unfortunately, has something to worry about in the current economy. Here's how to kick off your financial contingency plan.
Pump up your emergency fund. The ideal time to get aggressive about pumping up your emergency fund is when you know you could soon be facing an actual emergency. Like now. Financial experts recommend keeping three to six months' worth of essential expenses in a savings account for a reason: You don't want to fall into debt if you lose your job, especially when you may not have income coming in for a while to pay down those bills.
Here's a simple stress test to see if you have enough socked away for that proverbial rainy day, which, in this case, could be a monsoon. Look over your credit card and bank statements to see how much you typically spend in a month on necessary stuff (housing, food, insurance) and then divide that by the amount in your savings account. If the resulting figure is less than three, you're underfunded.
One way to beef up emergency savings quickly is to repurpose forgone spending. If you're working from home for the foreseeable future, redirect some of the money you're saving on commuting costs, lunch, dry cleaning and happy hour toward your rainy-day fund. Likewise, for savings on restaurant meals, movies and concerts, sporting events and all the other leisure activities that most people won't be indulging in for the duration of the pandemic.
Another possible source of a quick infusion of cash: your taxes. According to the IRS, 73 percent of taxpayers, or about 96 million Americans, got a refund on their 2018 return, averaging $2,869. If you haven't filed or received your virtual check yet, it's especially important this year to earmark all or most of this money for savings.
Lower your debt overhang. Likewise, you'll want to pay down credit card debt while you still have a regular paycheck coming in. Carrying a balance is never ideal, but sometimes cash-strapped families have to bite the bullet—and that could be you if you or your spouse is furloughed without pay or laid off. Keep your credit limit unclogged in case you need it.
Use a card with a long zero-percent financing period (15 months or more, ideally) to pay down credit card debt, which has been rising recently. Or if you have debt on two different cards, consider paying off the one with the smallest balance first, regardless of the interest rate. Research has shown that this "small victories" approach can keep you motivated.