There’s never a good time to make financial mistakes, but the COVID-19 pandemic can feel like a particularly bad moment for missteps. More than 40 million Americans filed for unemployment in recent months. And while some of those jobs have come back as states have reopened, the U.S. economy was officially declared to be in a recession. You aren’t alone if you’re feeling stressed right now. 


The paradox is that stress can drive poor money decisions. When you’re stressed, finding the headspace you need to make the right choices can feel daunting.


But you don’t need to make big moves to stay on track right now. There are simple steps you can take to protect your money, build toward a stronger financial future, and keep your stress level down.


Here’s where to start:

Don’t ignore your budget


Establishing a budget can safeguard against making impulsive choices that lead to the types of financial problems that take years to correct.


Health writer Alice G. Walton writes in Forbes that having a set routine “reduces ‘decision fatigue,’ the overwhelm and exhaustion that can come from too many options.” The same applies to having a budget. When you’ve already created a plan for how to spend your money, you don’t have to decide whether to spend or save each time the drive to buy arises.


Your monthly budget serves as a roadmap for living within your means and saving what you can to weather this crisis with as much stability as possible.


Avoid a streaming addiction


Bingeing on content can feel like a therapeutic way to cope with COVID stress and boredom. And you’ve got more choices than ever before when it comes to subscription services. But racking up monthly subscription charges will only exacerbate any existing financial strain.  Once a month, review all your subscriptions and cancel any you’re not regularly using. If you’ve got multiple music subscriptions on the go, repeat the process with those.


Look for free or low-cost alternatives for entertainment, such as YouTube (even if the ads are annoying). You can also take a pay-as-you-go approach by renting movies on a case by case basis instead of maintaining an Amazon Prime subscription just so you have access at any time.


Consider, too, whether there are other types of content and media that would benefit you right now, and at no cost. You may be able to sign up for a digital library card through your local branch and gain access to tons of eBooks as well as free DVD rentals.


Don’t blow your stimulus check


If you’ve been out of work for months, you may have a backlog of costs to cover, including rent, utilities, and credit card payments. Those are all worthy expenditures, and you should prioritize shoring up your basic living needs like food and shelter when your check arrives.


Once your essential expenses have been met, put whatever money is left over into savings. That way you’ll have a buffer if your hours get cut again or the economic crisis worsens.


Resist the impulse to live on credit


Knowing that money is tight, and you need cash to pay your rent or mortgage, you might be tempted to put other expenses on a credit card rather than dipping into your checking account. But unless you have a card with a low interest rate or you’re in a zero percent interest period, that plan can backfire quickly. Credit card balances can become very tough to pay down if you’re getting charged high interest on your purchases.


It’s uncertain when the economy is going to bounce back or if things will get worse before they get better, which means you could still face layoffs or reduced hours. If either of those happens, your credit card balances will climb quickly, and it could take years to pay them off (not to mention a lot of extra money in interest).


Instead of using credit cards, revisit your budget and see if there are items you can cut. After you’ve removed all non-essentials, think about trimming your grocery bill or substituting cheaper items for a while until your income increases.


Check out state and local resources as well, as many initiatives were created specifically to help people survive coronavirus financially. You may qualify for relief you didn’t realize was available to you.


Have a game plan when you want to stress shop


Everyone copes with stress in different ways, although for 52% of Americans surveyed by CreditKarma, those ways include some form of spending. The majority of people who admitted to stress shopping said they did so on a monthly basis, which can lead to high debt, a poor credit utilization ratio, and impact your credit score.


The desire to shop when you feel overwhelmed is understandable. Ordering new clothes, electronics, or even self-care products can be pleasantly distracting — until you check your bank account or your credit card bill arrives.


To avoid this financial mistake, identify your impulse-spending triggers and come up with a plan for how to divert them. Make your favorite snack and freeze it in portions so you can grab one when you’re feeling stressed. If yoga helps you re-center your emotions, make sure your mat is easily accessible for tense moments. You might even call a friend for accountability when you want to shop but know it is a financial mistake. Whatever you do, avoid being caught off-guard by the need to shop.


Level up


Educating yourself is critical to avoiding financial missteps. While you’re looking for a new job or waiting to return to work, consider taking a free financial education course so you’ll know how not to make money-related mistakes in the future. What you learn can help you get through the COVID-19 crisis. But it will also help you make smart money decisions long after the pandemic ends.

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