The once-in-a-century pandemic has left us with new challenges as well as new opportunities. Our offices have changed, our economy is growing again, and we’ve become stronger in so many ways. But with the challenges we’ve faced, many workers have suffered increased debt. More and more, however, office workers are choosing a different life and a different destiny by taking charge of their financial future. They’ve even used stimulus checks to help pay off credit card debt. Are you ready to take charge of your finances and finally get out of debt? Following our guide will help you achieve the goal of getting out of debt after the pandemic.
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Challenges with debt can be a distraction in the workplace
As COVID-19 begins to end, many office workers are facing severe economic challenges. Those challenges affect workplace productivity too. According to Insights For Professionals, 75% of office workers stated that money concerns, “affected their productivity at work.”
Action item: Reduce your stress by learning your spending habits, making a budget, and addressing your debt right away. Budgeting apps like Tiller can be a big help.
Childcare is a major issue as workers head back in the office
Many office workers who continued working during the pandemic were able to work at home. For employees who had childcare needs, this was a blessing in disguise. They often had flexible hours to deal with their children’s needs. Childcare can be quite expensive with costs on the average of over $750 per month, according to a report by CNBC.
If you are heading back to the office to work in person full-time, don’t forget to adjust your budget accordingly. In addition, make sure to see if you’re eligible to receive the Advance Child Tax Credit. If so and you haven’t begun to receive those advance payments, make sure to sign up with the IRS, as these advances can be immensely beneficial for covering childcare costs.
Negotiating flextime can help
Moving forward, many companies say they will still allow remote working and/or flexible hours, especially in the tech industry, according to a report by Tech Crunch. But certain industries, including finance and law jobs, will be more than likely to return to the office on a much less flexible schedule according to Vox.com. Still, more than 89% of digital and knowledge-based workers have the expectation that they will be able to work from home in a survey conducted by BCG.com, so some employers may have to change policies.
Action item: Ask management to allow you to work flex hours or work some days remotely to help with lower childcare costs. Remote workers can be just as productive as ones in the office according to a two-year study of more than 800,000 employees. If your employer isn’t flexible on flex hours, it may be time to update your resume and find one that is.
Robust employee benefits help workers get ahead
In addition to childcare, many office workers are concerned about their future and wonder if they will have enough to retire, as well as debt.
Fortunately, many employers are offering broader employee benefit programs that can help you control spending now and plan for the future.
Action item: Review the benefit options below and find out which programs your company offers. Take full advantage of the benefits you can access, or if you find your company’s benefits program lacking, look for an employer that offers more benefits.
A 401(k) allows you to set aside a portion of your pay, before taxes, and invest for the long-term (towards retirement). If you aren’t already enrolled, you should enroll in your company’s 401(k) plan as soon as possible.
Many companies match an employee’s 401k contributions, making it a very good benefit. A common match structure is that your employer will contribute 50 cents for every dollar you contribute to your plan, up to 6% of your annual salary. You basically get free money for retirement.
Employer-based healthcare plans are often the best value for getting coverage for you and your family. It goes without saying that you should enroll—as soon as possible—in your company’s health insurance plan. While it will decrease your net income, you’ll get coverage at far lower costs than you can get for yourself and be covered for extensive hospital stays.
Even if you’re young and healthy, unexpected medical emergencies can set you back financially.
Flexible Spending Account (FSA)
An FSA is a pre-tax program to pay medical, dental, and vision expenses. You can also use the money for health insurance deductibles, co-pays, and prescriptions. You decide during your employer’s open enrollment period how much you want to contribute, then the money is taken out of each paycheck.
Review your out-of-pocket medical expenses carefully when deciding how much to contribute. Otherwise, you could lose funds at the end of the year if your account doesn’t rollover. Still, this can be a smart way to save and avoid credit card debt on out-of-pocket healthcare expenses.
Dependent Care Flexible Spending Account (DCFSA)
DCFSA is a pre-tax program that can be used to pay eligible dependent care services such as daycare preschool, summer day camps, and adult daycare. This can be immensely helpful if your office job requires you to be back in the office full-time.
As with the standard any flexible spending account, these funds expire at the end of the year, so make sure to budget carefully so you only set aside what you need.
Financial wellness and discount programs
Many employers have lesser-known benefits that are generally free to all employees without a need to enroll. Some employers offer a financial wellness program that can provide valuable resources for budgeting, saving, and learning smart ways to achieve your financial goals. Another program offers discounts to employees at local businesses to help you save money.
While these types of benefits may seem small, they can help you stick to a budget and achieve your financial goals. So, check with your HR department and if they’re offered, use them.
Consider a second job or side gig
Some office workers need a second job to make ends meet. According to the U.S. Census, the number of office workers who had multiple jobs has been increasing since 1996. While the majority of those workers are concentrated in the healthcare, food, and retail industries, there are some office workers who also need that second income.
With inflation (cost of living) getting higher, we may see more workers getting a second job. Others have started their own small business or consulting ‘gigs’. Roughly 57 million Americans freelanced part-time or full-time in 2019 according to Forbes.
Action item: Consider a second income, from a part-time job or side gig to help pay down debt, increase your savings so you can accomplish a specific goal, or as a hedge in case your regular job ends.
Debt relief options that are ideal for office workers
Like everyone, debt is a major concern for office workers. The Pandemic caused many workers to suffer job losses, reduced hours, or lower rates of pay. Some also don’t keep a budget, which can make it challenging to cover new costs as they transition back to work.
Action item: Start keeping a budget so you understand your spending habits and can adjust quickly as your situation changes. Analyze your spending and eliminate costly expenses that you don’t really need. Then consider the following options if you have credit card balances to pay off.
Debt Consolidation Loans
Since office workers have a verifiable source of regular income, debt consolidation loans can be one of the best options for paying off debt.
With a consolidation loan, all your debt is combined into one manageable monthly payment. Payments are set and do not change, so borrowers don’t have to worry about interest rates changing. If you are only paying the minimums right now or are getting to that point, while you still have good credit, consider a consolidation loan.
Debt Management Program
Another option is a Debt Management Program (DMP). The program helps you pay off debt faster while working with your budget and lowering interest rates. You don’t need good credit to qualify either, so if your credit has taken a hit during the pandemic, this may be the best option. As long as you can make monthly payments, you can pay off your debt in full to avoid further credit damage.
If you don’t have good credit and are not planning for any major loans or new credit, you may want to consider debt settlement. Debt settlement, sometimes called debt negotiation, helps you get out of debt by paying back only a portion of what you currently owe. It’s the fastest and cheapest way to get out of debt without resorting to bankruptcy.
For office workers that fell significantly behind with debt payments during the shutdowns, this can be a good option. It can allow you to deal with past-due debt and collections quickly, so you can get back to financial stability faster.
Take action now
You can control your financial future and your stress levels. Before your debt becomes completely unmanageable, or if it already is, let Debt.com connect you with the right solution to recover. There is no reason to have to worry about debt once you address what you owe and get a plan to pay it off.
Get a free evaluation to find the best debt solution for you.
Article last modified on April 26, 2023. Published by Debt.com, LLC