Should I drain my emergency savings because of coronavirus?

First off, congratulations for having an emergency fund! Approximately 25% of Americans couldn’t cover an unexpected $400 bill, let alone a month of expenses. To answer the question of whether or not you should drain your emergency fund because of coronavirus, that all depends on your situation.

Do you need to drain your emergency fund? If you’ve lost your job or had a cut in your hours or salary, then using the money in your emergency fund is warranted. Whether you need to drain your account is another question.

When you have a loss of income, the first thing to do is to revise your budget, cutting out all of the extras. This includes eating out, getting coffee out, and entertainment. All the little extras. Your budget should consist only of necessities such as housing, utilities, car payment, insurance, gas, medicine, and food. Cover your basic survival needs so you have the ability to look for employment.

Next, evaluate all of your income. Think of new ways to come up with extra cash. This could include selling unwanted or unneeded items, babysitting for friends, and donating plasma. Once you’ve done this, determine how much you need to take out of savings to cover only the necessities.

The goal is to be as frugal as possible so that you only need to use some of your savings. This will help to stretch that fund out as long as possible. It’ll also give you time to survive until hopefully the tide turns, and you can get back to full employment.

Recommended Articles

3 Strategies to Stretch Your Food Dollars

As the COVID-19 pandemic continues, you may have to stretch a lower income to cover regular expenses. If your income has been reduced or you have had a lot of unexpected expenses, having enough money to feed yourself and your family may be a challenge. Food is a necessity to maintain a healthy life. But… Read more

What to Do If You Need Help Paying for Prescription Medicines

If you’ve ever been in the situation where you have to decide whether to pay for your prescription or put groceries on the table, you know how scary that can be. What many people don’t know is that there are several programs that can help you pay for those prescriptions. They are called Patient Assistance… Read more

8 Tips for Financial Planning During an Economic Downturn

It’s difficult to create a solid financial plan when the economy is booming. Add an economic downturn and creating a financial plan can seem impossible. Here are eight tips for financial planning during a downturn that can help you stay the course. 1. Be Sure You’re Thinking Clearly It’s easy to give in to panic… Read more