The service and hospitality industry is dipping into emergency funds to pay the wages of bartenders and servers stuck in Coronavirus limbo — but as these funds run out, workers are falling further and further into debt.
Even as states begin to slowly lift restrictions, bars and restaurants are being hit hard by COVID-19. With no other safety net in place for the workers who are without jobs indefinitely, industry groups are creating emergency funds to help those impacted. Unfortunately even with these funds in place, workers are taking a serious financial hit.
The Masses in Debt
Food preparation and service is the second most common occupation in the United States. Waiting tables is the eighth most common. There are more than 12 million Americans working at over 600,000 food service and drinking establishments nationwide.
Servers and managers were recently interviewed by Brookings.edu that were in different financial positions – depending on whether they had savings, debt, existing health conditions, or a partner who was employed or had health insurance. Several noted that most of workers in the industry tend to live paycheck-to-paycheck and found the top concerns among workers were how they would pay their rent or mortgage, whether they would lose their health insurance (if they had it), what they would do if they got sick (especially if they did not have health insurance), how they would pay for food and utilities, and whether they would get further in debt than they already were.
Tackling Challenging Times
Despite the odds being severely stacked against you, there are ways to try and help your personal finances during this pandemic. Try the following steps to help get yourself through the next few months of hardship:
Seek Financial Aid
A number of charities and other organizations continue to offer financial aid, assistance and job opportunities to unemployed hospitality/service workers:
- The Restaurant Workers’ Community Foundation has created a COVID-19 Emergency Relief Fund for individual workers and small businesses in the restaurant industry.
- The One Fair Wage campaign, a nonprofit created to advocate for restaurant workers, has set up an emergency fund for tipped workers and service workers impacted by the coronavirus.
- In addition, the United States Bartenders Guild (USBG) is offering emergency grants for bartenders. According to the website, bartenders, their spouses, or their children can apply for a grant through the Bartender Emergency Assistance Program.
- Jameson, the Irish whiskey brand, has pledged $500,000 to the USBG to support those dealing with the impacts of the coronavirus.
- Another Round Another Rally offers $500 relief grants for hospitality workers who lost their jobs or had their hours cut because of the virus.
- CORE offers assistance to service industry workers who have tested positive for COVID-19 and have a child living in their home.
- Many workers may qualify for unemployment benefits. Check your information by state.
- If you notice payments you simply cannot afford outside of your essential spending, such as utility bills, call your provider and ask for temporary forgiveness. Some local utilities are suspending disconnections and waiving late fees for affected customers.
Set a Weekly Budget
When every penny counts, you need to make every penny accounted for. Set – and stick to – a tight budget each week. Avoid panic buying in bulk as you may end up with groceries/excess you don’t need. Instead make a realistic inventory of what you really need to get by.
This is also a great time to go through your statements with a fine-toothed comb and cancel all your subscriptions: Gyms, Netflix, Hulu, Spotify… they all need to go.
Get Cash Creative
Try your hand at a few alternative ways to bring in some money: it can go a long way. From doing your own cooking (Making your own meals will save you money, especially if you decide to here.) to selling your old stuff online, there are actually tons of ways to use your creativity to save $$$. Check out our blog on ‘How to Make Money at Home During COVID-19’
Tackle Student Loans
Federal student loans come with several already-existing options. There are two ways you can temporary suspend your payments: deferment and forbearance. With deferment, you may be able to avoid interest accrual, while with forbearance you won’t, which means your debt will grow. A best practice during forbearance is to pay down the interest portion so that the debt will not grow.
CreditCards.com reported 59% of American credit cardholders entered the outbreak already in credit card debt. That’s equivalent to about 110 million U.S. adults. Of those who are in high-interest debt, many have carried balances for a long time, according to the survey.
There are some things you can do if you find yourself overwhelmed with multiple debts. Call the company directly and try to negotiate and see if they are offering relief. If you have multiple credit cards now may be the time to consolidate all debt on to one balance transfer card.
Consolidating into a personal loan may also be an option, especially if the rate would be lower than what you are paying on your card balances. If you take out a loan and don’t need to use your credit cards for any emergencies, it’s better to avoid using them at all. If you can help it, you don’t want to build those balances right back up again after you pay them off.
Take Note of Your Mental Health
While this doesn’t directly bring in cash, it is essential to look after your mental state right now.
Be in touch with other people regularly on social media, e-mail or on the phone, as they are still good ways of being close to the people who matter to you.
Create a new daily routine that prioritizes looking after yourself. You could try reading more or watching movies, having an exercise routine, trying new relaxation techniques, or finding new knowledge on the internet. Try and rest and view this as a new if unusual experience, that might have its benefits.
Make sure your wider health needs are being looked after such as having enough prescription medicines available to you.
Our biggest concern during the COVID-19 pandemic is our health and the health of our loved ones. But lost work, lost business, and uncertainty are creating financial concerns for the healthy and sick alike in the service industry and beyond.
Day-to-day frugality, even in small ways, can help now more than ever. These are scary times, but you do have some control. Having access to good quality information about the virus can help you feel more in control, if not financially, then emotionally so.
COVID-19 UPDATE from TLC Loans
As the COVID-19 crisis continues, more individuals than ever are going to face economic hardships, and these resources will become more important than ever. Due to the ever-changing circumstances of this crisis, actions taken by the government are changing frequently. For updates and resources to help navigate the path forward, you should keep up with the actions federal, state, and local governments have taken to combat COVID-19 in your area.
If your financial condition has been negatively impacted by the Coronavirus (COVID-19) and you are worried about your financial well-being, TLC Loans remains committed to assisting you in your time of need. If you need a personal loan, we can help! Find out more and apply for your loan here today.