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How To Survive A Recession Financially - a Guide To COVID-19

Updated: Oct 15, 2020

It may not feel like it, but there is a lot you can do

Almost overnight, financial education and preparedness became way more important.

In a matter of weeks, the effects of the COVID-19 virus have landed on more than just our hospitals. Our local businesses, startups, restaurants and bars are all feeling the pinch, which ripples into our pockets as consumers, individuals, families and communities too.

Hours are being cut, doors are being closed, and many are scrambling.

So how can we all be a little more calm?

Right now, that calm is Financial Intelligence - knowing what to do in a time that’s incredibly emotion-driven. Financial Intelligence is all about healthy money habits. One silver lining of this shutdown is that it can really help you set good new habits!

5 Tips on How to Survive a Recession Financially

Below are 5 important strategies to managing your money in a very uncertain time. We invite you to review this guide and share this with anyone else that’s feeling challenged financially right at this moment. Here's what it covers:

How to Survive a Recession Financially

1. Spending & Essentialism

2. Strategies for Bills During Hardship

3. Use of Credit & Loans

4. Making Extra Income

5. Online Services for Support

Money is so emotional.

When there is so much information bombarding us at all times, it is very easy to lose control of good spending habits. We humans don’t make the best choices when we panic, so take a breath and let’s make a plan.

Part 1: Spending & Essentialism

For most of us, this time is going to be about understanding what is a ‘want’ versus what is a ‘need.’ Those lines might be confusing right now. For some, they may seem really different compared to mid-February.

The first thing we recommend is to make a list of all your current financial obligations, and break them into Essential vs. Non-Essential.

Here are some examples:

Essentials - Housing, Car, Health Care, Debt repayment, Utilities, Groceries etc…

Non-Essentials* - Restaurants, Bars, Vacations, Clothes, Shoes, Tech, etc…

With the exception of food, health, and safety spending, most essentials are just our recurring bills. We’ll cover the bills later in this post, but let’s start with a list of recommendations and resources to help cut back the non-essential spending:

1. Learn to cook bulk meals - Buy ingredients and cook bulk meals like stews, casseroles, soups, stir fry etc… Here are two great resources for ideas of cheap bulk cooking to save money and eat healthier than carry out.

2. Pick up a new hobby - There are many hobbies that are free or very low cost -- think hiking, cooking, gardening, playing an instrument, writing a blog, board games, exercise, vlogging, meditation etc… Some of these can even turn into side income, but regardless, doing things you enjoy makes you feel better, and therefore less likely to spend.

3. Watch out for online shopping sales - Everything is on sale right now. AND it’s easy to feel lonely and down on yourself right now, but if you are really concerned about your income & financial situation, then don’t buy things you don’t need! If there’s ever a time to cut back, NOW is that time.

Here’s some help - Our 1 hour mini-course Prime Spending: How to Control Your Spending Online is free and only takes 1 hour. It’s all about how to control the emotional urges to shop online.

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4. Be Practical - What has value, use and utility has priority right now. Things that do not provide or get used do not. Be mindful of your spending and if you need help with an individual purchase decision, call a friend.

5. The 24-hour Cart Rule - Since everyone is online and online spending is normal, put something in your cart but wait 24 hours before purchasing. That distance can create a calming for your emotional and impulsive ideas. Give it a break. Come back later and see if you still need it.

Non-essential spending is very emotional, so the more you can work on yourself, the easier it will be to let go of non-essential spending. Staying healthy is also a huge benefit here as well. Supporting local and small businesses is very important to us, but we mean non-essential when you are really struggling financially.


PART 2: Strategies for Bills during Hardship

Essential spending is unavoidable. So what can you do if you’re feeling underwater, if your recurring bills can’t quickly change and you need a way out?

If you need immediate help with your bills, contact your creditors right away. Most companies and organizations are offering different types of financial assistance right now. Many are waiving late fees, but you should notify them as best practice.

Here are some strategies to cut back on your Essentials:

1. Adjust your housing situation - Can you get a roommate? Move in with someone? Move home with parents temporarily? This may seem drastic, but if it keeps you out of debt, it’s likely worth it. The government may forgive rent/mortgage payments temporarily but there’s no way to know if or for how long.

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2. For homeowners, consider refinancing - Mortgage rates hit an all-time low in early March. Refinancing for a lower payment depends on a variety of factors, so check out this Discover calculator to see if it’s a good option for you. Financial experts generally recommend considering refinancing if you can get a 0.5% to 1% point drop in your rate. But, know that many mortgage lenders are overwhelmed right now as well and that this process could be slower than typical.

3. Contact your credit card company - Capital One, Chase, Citi and Wells Fargo, and some credit unions are encouraging people to call them and see how to help with financial commitments. More will likely join soon. Here’s a list of their contact numbers.

4. Adjust your student loan payments - There will be an interest freeze on student loans going into effect soon. This means that if you defer your loan payments, you won’t accrue extra interest. Contact your student loan provider to see how you can best adjust your payments:

  • Defer your loans - This allows you to put off the payment for now. Forbearance is a similar strategy used, but deferment is usually better. Either way, contact your provider and learn what’s best.

  • Switch to an income repayment plan - This allows you to adjust payments based on your income. Click here to apply. Click here to see potential downsides that may arise down the road. However, you can always switch back later.

  • Refinance your loans - This only works if you already have private student loans. Private student loans are case by case on how they offer forgiveness. So contact them and be sure you understand the mid/long term consequences of any help they provide. If you have public loans, don’t switch to private.

5. Contact your Utility providers - Many providers are suspending service disconnections and waiving new late payment charges at least until May 1, and will with customers on a case-by-case basis to establish payment arrangements and identify service assistance options.

6. What about your car? - Can you refinance your car payment? Is it the right time to trade in and downsize?


Part 3. Use of credit & Loans

Emergencies happen to everyone. The way you handle them is key.

Credit or other loans aren’t as good as cash - however, it can be a great failsafe to avoid devastating decisions or outcomes.

Managing credit is a key component of how to survive a recession financially.

When it comes to credit, the strategy is to use the products (cards, tools) with the lowest interest - because remember that credit is just a short term loan. You can call your credit card company to get details on your interest rate.

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Here are some strategies to find borrowing with lower rates:

1. Consider a personal loan - Personal loans range from $10,000 - $20,000 on average and usually have terms of 3-5 years. Having a good credit score is helpful here, but either way, they are usually significantly lower rates than credit cards (roughly 10% vs. 17%). Check different rates from your bank and lenders like SoFi and Payoff.

2. Low interest lines of credit or credit cards - Banks can help you find small dollar amounts if you need it, especially if you have a good relationship with them. Many will offer 0 interest for the first 12 - 18 months. Call your credit card company and see if they can approve a reduction in interest, or if they are waiving late fees.

3. Be careful with retirement savings - If you have a Roth, you can withdraw contributions tax/penalty free. If you have a 401k really try not to touch it! If you pull it out before turning 65, you will pay massive fees (over 50% in most cases). In both cases however, the market is plummeting, so wait as long as you possibly can until it goes back up again! You can sometimes take a loan on your 401k, but you may want to use this only as a last resort.

4. Avoid payday loans or cash advances - Always. They are predatory and super expensive.


Part 4: Making Extra Income

Right now there are two main opportunities for you to make side income.

One is digital skills. The other is current tangible resources that you can leverage. Some will be fast cash now. Some will take time, but could grow larger. Some require specialized skills and others don't. Point is, get creative and get yourself out there!

Digital Opportunities

How to Survive a Recession Financially 5
  • Virtual Assistant

  • Digital Content (music, video, photo, etc)

  • Language translation on calls

  • Converting content to webpage or online course

  • Social Media training

  • Online Tutoring

  • Social media management

  • Transcribe video or audio to text

  • Coding

  • Website design

  • Upwork is a freelancing platform for digital solutions providers

  • OutSchool & other online learning providers

If you have transportation and time:

  • Food delivery & grocery stockers

  • Grocery/personal shopping (if you’re willing to risk it)

  • Delivery jobs for Amazon and UPS

  • Do local tasks and handy work on TaskRabbit

  • Working families are hiring for childcare and tutoring

  • Cleaning and Contracting companies may be hiring

  • The US Government may be looking for Census takers


Part 5: Online Services for Support

We will continue updating this list as opportunities changes:

1. Tax Filing - The IRS extended the deadline to file/pay taxes to July 15th.

2. Unemployment Insurance - MD temporarily waived the 10 week waiting period before you can apply, so you can now apply right away. If you want to apply, do it soon.

3. Sick / Family Leave - As soon as the federal government releases their stimulus, we'll update this.

4. Disability Insurance - As for right now, MD disability insurance does not cover Covid-19 related time off work.

5. Small businesses - Maryland just released a number of relief measures for small businesses. If you own one or work for one, this could be worth notifying your superiors about - Maryland Coronavirus Information

6. If you are looking to help - visit Maryland Unites to see where help is most needed


Stay Calm

We’ll repeat it again. These are emotional times, and poor financial decisions are always emotional.

The best thing you can do to be financially intelligent is to stay calm and not react impulsively. This is a daily, hourly, and minute-by-minute practice. But it is completely essential for smart decision making. This is how to survive a recession financially.

Take a deep breath. You got this.

Reach us at if we can help.


In response to the Covid-19 crisis, Ortus Academy launched a #TeamHuman initiative making all our Youth online courses available for free.

We are also hosting free webinars on Financial Stability During Uncertainty.

Information on our TeamHuman initiatives can be found at

Discover your Money Personality


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