As soon as the presents are open and the shortbread cookies are gone, millions more Americans will be worrying about how they’re going to pay their bills.
The provisions of a federal COVID relief law that extend unemployment benefits to more people than usual are set to expire Dec. 26 if Congress can’t reach a deal. A new study from The Century Foundation reveals the numbers who'll be affected: 7.3 million members of the gig economy and 4.6 million workers who have already exhausted their state benefits.
The loss will be devastating for families who were already struggling to make ends meet, making it even more essential to use every trick available to cut costs.
The hits keep coming
This would be the third blow for millions of workers who lost their jobs in the early weeks of the pandemic, then lost a $600 boost to their weekly checks when another provision of the coronavirus relief act expired in July.
Earlier research showed that the $600 drop pushed unemployed people even deeper into “financial fragility.”
The number of unemployed workers who lack even short-term savings rose from 38% in August to almost half in October. About 29% were spending more than their household was taking in, up from 19%. And the share who couldn’t pay their bills on time doubled to 22%.
Those numbers barely budged among employed Americans.
Nation’s recovery not fast enough
The unemployment rate has been steadily improving month after month, but the nation still has 10.1 million fewer jobs than it did before the pandemic arrived. At the current pace, it will take until February 2022 to regain all of the jobs lost.
“There are simply not enough jobs being created to support all of the workers running out of aid before the end of 2020,” The Century Foundation’s Andrew Stettner and Elizabeth Pancotti wrote in their study.
Meanwhile, the U.S. is breaking daily records for new coronavirus cases. Further lockdowns are already underway, and more layoffs may not be far behind.
It's time to prepare
If you’re still struggling to find work, or you worry you might lose your job soon, you may not be able to rely on Congress reaching a deal in time for New Year’s.
Here are five ways you can improve your financial footing no matter what happens.
1. Cut down on monthly expenses
Start by making a list of your monthly bills and expenses to find areas where you can cut costs.
You can also save a surprising amount on food by preparing your meals at home rather than ordering in. And if you use a cash-back app when you buy your groceries, you’ll get a bit of money back in your pocket every time you shop.
2. Broaden your job search
If you work in an industry that’s been hit particularly hard by the pandemic, your prospects may seem grim.
You should consider looking for work outside of your chosen field if you’ve been coming up short with your usual search terms.
The idea of stepping out of your comfort zone may be daunting, but you could be qualified for all kinds of jobs you aren’t aware of. Certain job boards even use AI technology to match you to new and interesting positions based on your skill set and experience.
3. Make extra cash with a side gig
While you’re looking for your next full-time position, you can bring in a bit of extra money by picking up a side gig. Digital marketplaces will match you with eager buyers all over the country.
Another option to bring in some quick cash is to sign up for an online rewards program. You can earn money and gift cards by completing simple tasks like filling out surveys, watching videos and even playing games on your smartphone.
During times like this, every little bit helps.
4. Consolidate your credit card bills
If you’ve got high balances on multiple credit cards, trying to make minimum payments every month is hard without steady income.
One option that may help is a debt consolidation loan with a lower interest rate. You’ll be able to pay off all your existing debt immediately and only have a single monthly payment to worry about.
5. Refinance your mortgage
Because mortgage rates cratered during the pandemic, homeowners need to take a closer look at refinancing.
More than 18 million homeowners have the potential to cut their monthly payments by around $300, says data firm Black Knight.
Rates can vary wildly from one lender to the next, so be sure to shop around and compare a minimum of five quotes to get the best rates.