It's the first of the month, which means some bills are due. However, with recent layoffs and work hours being cut, many Americans are strapped for cash.
7 On Your Side talked with a certified financial planner to get advice and help you through this.
RELATED: Paying for a service you can't use because of COVID-19? Here's what you need to know
“The best thing I think you can do is take control and understand everything," Alicia Hudnett Reiss, Certified Financial Planner and founder of The Business of Your Life said.
Make a list of all the different accounts you have. Where you have money and what your available options are. Make a list of all the bills you have. It’s really just about listing out your assets, listing out your debts, listing out your accounts, things like that, and really staying on top of everything.
After you identify all of your essential expenses, Reiss said contact everyone you will owe money to and see if there is any flexibility with payments.
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“I would suggest calling all of your service providers that are expecting payment from you and to explain your situation," Reiss said. And again, everyone is aware of what’s going on, but calling and talking about your specific situation and coming up with a plan with your service provider for the next few weeks, for the next few months. Whether it’s going to be a decreased payment, whether it’s you don’t have to pay anything right now for a certain time.”
Many service providers are already allowing customers to put payments on hold during the pandemic. Federal Student Loan payments have also been put on hold. If you have a private student loan, you should contact your servicer for repayment options.
“Whether it’s reduced paycheck, whether they are getting on unemployment or whether they are also going to get a stimulus check," Reiss said. "So we want to look at where they may be getting income for the next few weeks, the next few months.”
Finance company, Money Geek, outlines how to apply for unemployment in each state, HERE.
Doug Jones, co-founder and CEO of Money Geek said, "There are resources for many different situations, people's unique situation that we've tried to cover in a fairly comprehensive way."
You can get Money Geek's compiled list of resources for a variety of different situations, HERE.
Reiss said for many people, the stimulus check from the government will be a lifeline, but people need to be smart about how they spend it.
"The next few weeks, the next few months, if you are bringing in any type of income, even if it's unemployment, even if it's the increase unemployment benefits or the stimulus money, you need to conserve your money right now. Even if things have been put on hold, for example, you don't need to send in your mortgage payment right now or your rental payment right now, save whatever money you have coming in," Reiss said.
"Anything coming in right now, you should be putting away," she said.
For the next few weeks and the next few months, just pay essential living expenses.
There are also numerous nonprofits, like United Way, that are offering financial assistance.
Reiss said after getting an understanding of your situation and looking at your options, now is the time to use your savings to pay the bills.
"The first place we are going to look is at any type of cash available to them," Riess said. "Whether it's in a cash savings account, an emergency account, whether they have a taxable brokerage account, that is the first place we are going to look."
Reiss said if you do have a savings account, "it can be hard right now having to use that money and maybe having to drain those funds, but the good thing to remember is that's why those accounts are there so that you don't have to take on debt and you don't have to take early withdrawals from your retirement account."
Reiss said if you don't have cash available, "The next place we can look is to see if they have any lines of credit. Like a home equity line of credit or even credit cards, we'll take that into consideration."
She said as a last resort, "We will also take a look at retirement accounts, and I don't say that lightly because I typically do not recommend anyone taking early distributions from a retirement account, but obviously with the situation going on right now, that might be the only place that a lot of individuals have savings."
Reiss continued, "Specifically with a Roth IRA you want to remember that any of your original contributions to a Roth IRA were after-tax and therefore we always have penalty-free and tax-free access to whatever contributions we've put into a Roth IRA. So when you're looking at taking money from a retirement account, that would be the first place to start."
Reiss said lastly, you can look into an employer-provided account like a 401(k) or 403(b).
"Most plans allow for loans and with the recent stimulus package, they have increased some of those loan amounts people can take from an employer retirement account," she said.
"Next, the recent stimulus package also allowed for individuals to take up to $100,000 from retirement accounts, penalty-free, that then they have a three-year window to pay back. A lot of those details are still being worked out so we would want to take a look at the IRS guidance."