Financial priorities: What to consider when going through a financial hardship?

  • The first step is to prioritize what is essential, for example shelter, groceries, utilities, health items, car insurance and transportation.
    The first step is to prioritize what is essential, for example shelter, groceries, utilities, health items, car insurance and transportation.

By Johanna Gómez:

I have recently been asked how to manage money during a crisis like COVID-19 when income can be restricted.

During a financial crisis, you can create a crisis budget to manage your money and to control your spending habits. It is time to pause what is wanted and concentrate on what is needed. The first step is to prioritize what is essential, for example shelter, groceries, utilities, health items, car insurance and transportation. Also consider the items you can pause at the moment such as gym membership, entertainment, monthly subscriptions, cable and other non-essential items.

If your income has been affected, make an inventory of valuable items you possess in storage and not in use. You can sell those, for example, in a yard sale or online to increase your income. Everything will help when facing a financial challenge.

Once you prioritize, take a close look at your total monthly income, obligations and debts. Calculate how much you are bringing home even if it is a temporary income, such as reemployment benefits, or income from an odd/seasonal job. Also add all debts you currently have with the total of their minimum payments. Before you skip a payment, make sure your core needs are covered. Losing housing, utilities, or transportation can affect you more so prioritize those items on your list. Consider those payments such as credit cards payments, medical payment plans or personal loans, that although may affect your credit score, will not impact your well-being. Verify what bills you have in auto pay. Once you balance your crisis budget, you will be able to assess what is affordable at the moment.

Once you have created a crisis budget, you will have an updated vision of your financial situation. If you realize you will have to miss a payment, it is time to check out your creditor’s website. During this unprecedented time, creditors, services providers and financial institutions are offering flexible payment plans to consumers. Now is time to use the PHONE, give them a call and when you do, consider the following:

Promptness: Call your creditors before paying less than the minimum payment, skipping a payment or your payment become due.

Honest: Be honest with your situation. Tell them the truth about it and what you have done to tackle your debt.

Options: Ask for a “relief option” or “hardship plan.” This will enable you to have some flexibility on your payments. If you can afford less than the minimum payment, ask if a reduction of your minimum payment is possible. Do not forget to ask if late fees and interests during this time can be eliminated or waived.  Ask if the agreement will affect your credit or will be reported through the Credit Reporting Agencies (CRA).

Next: Be realistic about the options offered; give accurate answers if they ask when you can make your “next payment”. Also ask when you will need to call “next”; some creditors are asking consumers to call for options every month some might give you an arrangement for a certain period of time.

Execute: Do exactly what was agreed on your “relief option/hardship plan.” If for some unforeseen reason you can’t, call your creditor immediately. Continue to keep records of the phone number you call, who you talk to, date, time and a brief summary of the conversation.

Stay focused, stay safe and take care of priorities. Remember these adjustments are temporary. The government has made a provision for those directly affected by COVID-19 and facing financial consequences due to the impact. To learn more about the CARES Act 2020 provisions go to Remember as part of the government CARES Act, the three national Credit Reporting Agencies (CRA) are offering free weekly reports until April 2021. To monitor your online credit every week visit Check your local government for assistance programs availability, for Osceola County visit

Need help? Contact your local UF/IFAS Extension office. If you are interested in more of our programs, contact us the UF/IFAS Extension Osceola County at 321-697-3000. For more information about our programs, visit