Unexpected situations — whether they involve job loss, health issues, or a pandemic — can create money challenges that require some creative thinking and action. Recent events have put many people in a dire financial situation never previously faced. If that defines where you are at right now, we want to share some insights on how to take advantage of loopholes and assistance for those times when money is tight.
We asked money and business experts for their tips based on previous experiences and research.
1. Low-Income Assistance
You may not be aware that many companies and organizations have tiered pricing for their products and services. All you need to do is go to your existing account and search for these assistance benefits. Or, you can call your service provider to learn more about these valuable options.
“Many companies offer programs designed for lower incomes. From utilities to prescriptions, there are many ways to identify discount programs that can help you save more money. All it involves is doing a little research, asking for assistance, and potentially verifying income through a form or two. In return, those cost savings can help you get by on less until money starts to flow at a higher rate.” – Brad Anderson, Editor of Read Write
“As long as the loopholes are ethical and legal, there are many payment deferral programs available. Landlords and creditors do not publicize these, but if money is tight, it is worth asking.” – Michael Gleason, Co-founder of ATM.com
2. Tax Breaks
Believe it or not, even the IRS is willing to give people a break on their taxes. Numerous credits are designed for lower incomes. You will have to submit proof that your income wasn’t what you once had reported, but it’s worth it to enjoy some financial relief.
“Take advantage of every tax break possible, such as the Earned Income Credit for those who make under a certain gross income amount. There are also ways you can postpone your payments if you can show a drop in income or financial hardship. While you will still have to eventually pay your tax obligations off, making payments or waiting to do a lump sum, even with some fees, can buy you the time you need to get your income back on track.” – Chalmers Brown, CTO and Co-founder of Due
3. Government Aid
Although there is somewhat of a stigma associated with government assistance, there shouldn’t be. It’s meant to help those in need, and that may be you for a temporary time period. Remember that all of your hard work and tax payments have gone toward supporting those programs so it may be time to tap into them to get you through these difficult times.
“There is nothing wrong with taking on government assistance if money is tight. Even if you haven’t lost your job but income has gone down because you have lost clients, you can still apply for some unemployment benefits or other types of assistance programs. There is government-backed health insurance and medical services as well as food assistance programs. These are there for temporary relief and well worth tapping into when needed.” – Kristy Rampton – Founder of Buttercup
4. Proactive Changes to Your Financial Situation
It’s easy to feel a loss of control over your circumstances when you have been laid off or furloughed or your small business has been shuttered. However, you can also look at this situation as an opportunity to make changes that help you get control back over your finances.
“Rather than a loophole, we’re seeing people shift from being financially defensive to adopting a more aggressive stance. They’re taking advantage of their newfound time, viewing it as an opportunity to shift their careers and learn new skills. For example, Coderbyte.com saw a surge in first-time developers practicing and improving their coding skills on the platform. Skill diversification can help professionals, both now and after the pandemic is over.” – Daniel Borowski, CEO and Founder of Coderbyte
“One of the best methods for squeezing dollars and pinching pennies when money is tight is to find areas where recurring discretionary spending was out of control. Many have found things like the daily Starbucks
Don’t Ask or Do, Don’t Get
Every loophole listed here involves action. You need to research, find, ask, and do if you want to go from a tight money situation to a flush money position.