Learn What to Do if You Are Facing Financial Hardship Because of Coronavirus

6. Take advantage of community and government aid programs

Currently, the government is working to put laws in place to assist cash-strapped Americans amid the crisis. However, communities and local and state governments already provide a wealth of additional resources. Food banks are one resource (consider donating to one if you are not experiencing financial difficulties), and some groups can assist with costs such as utilities.


In these circumstances, places of faith will also assist. If you contact your local government, they should be able to provide information on where to discover these groups. Social media platforms like Facebook are a fantastic way to start your search for community groups.

7. Make use of retirement funds

You may also be able to access your retirement resources. However, financial counselors advise that this should be the last choice. You can withdraw your Roth IRA contributions tax and penalty-free (but not investment gains).

If you don’t have a Roth, you may be able to borrow from your 401(k) (k). You will escape fines this way but have to repay it with interest within five years. There are numerous disadvantages to taking this route:

You will forfeit any potential investment development for the term of the loan, and if you do not repay the loan within five years, you will be required to pay taxes and other penalties.


If you leave work or are fired before the loan is repaid, you must refund the entire amount within a few months to avoid penalties. Avoid payday loans at all costs. Avoid payday loans, also known as cash advances, if possible.

These loans are simple to obtain and can be helpful in times of great financial stress, but they are pretty costly. According to the Consumer Financial Protection Bureau, the national average APR for a payday loan is about 400 percent. Even a high-interest credit card has a lower APR (between 12 percent and 30 percent ).

These are also highly exploitative and can trap borrowers in debt. They are designed to be paid off in one considerable amount, usually within two to four weeks of being created. You’ll be charged with penalties and costs if you can’t repay it. You’d be better off accumulating credit card debt than taking out these loans.