How to protect your finances and credit in tough times

The quickly unfolding coronavirus outbreak is an extreme case, but any sort of hard times will test our personal finances. Many people are now facing reduced work hours and income while watching with worry as stock market upheaval continues.

Preparation is better than panic, however. And starting now is better than doing nothing.

To get your finances ready for tough times, you should know:

• How to find savings in your budget.

• How to make some quick cash if hours are reduced.

• How to protect your credit score.

• How to triage bills if you can't cover everything.

• How to think through your next move if you lose your job.

A budget makes you aware of where money is going so you can adjust when needed.

Online tools can help you track your spending and set up a budget. Searching for "budget worksheet" will bring up options that can give you a framework and help you remember expenses that don't happen every month, such as car maintenance.

Once you know where your dollars are going, you may spot categories to trim. Finding ways to save money can also help you start or bulk up an emergency fund.

About that emergency fund: You don't need a huge amount stockpiled for it to make a difference. Even $250 in savings can help a family avoid pitfalls like missing a utility payment, according to a 2016 study by the Urban Institute, a Washington, D.C.-based think tank. Gradually building to $500 or $1,000 adds more protection against financial setbacks.

If the paycheck from your main job is in danger of shrinking, a side hustle can be your friend. By thinking ahead, you can have your Plan B ready to go.

Things that you may be able to do include: selling gently used clothes, trading in old electronics, taking surveys, tutoring online and selling handcrafted items on Etsy. You may not make big money, but it will be something. If you sell items that you make, now may be a good time to increase inventory.

You might find yourself putting more on your credit cards, especially if you don't have an emergency fund or if most of your money is invested. It's essential to pay on time if you possibly can — even if it means carrying a balance. Paying on time is the most important factor in your credit score.

Consider contacting your credit card issuer or lender if you are affected by the corona­virus. You may qualify for some leeway. For instance, Citi has e-mailed customers letting them know about assistance including "credit line increases and collection forbearance."

Also, be aware that how much of your credit limits you actually use has a big effect on your score.

If your credit score is good, you could prepare by asking for higher credit limits or applying for a 0% introductory rate credit card. (An exception: Avoid new credit applications if you are about to finance or refinance a large purchase, like a home or car.)

It pays to safeguard your score because having access to credit, at a reasonable interest rate, can help you navigate through rough patches.

There are already some assistance programs available that suspend fees or cut what you have to pay. Be strategic about paying bills when you can't pay them all.

If something has got to give, look at survival first. You need to cover food, utilities, shelter and work-related expenses, such as transportation, cellphone and child care. Anything else can go unpaid.

Skipping some payments will damage your credit, but you can rebuild later when the crisis is over.

A lingering downturn can lead to long-term job losses. If your field of employment is vulnerable, it's wise to keep your résumé updated and take advantage of networking opportunities.

Losing your job can temporarily put your brain in a fog so deep it's difficult to think about what to do next. Having a game plan to handle job loss, and a schedule of sorts, can give you a leg up.

E-mail: boshea@nerdwallet.com. Twitter: @BeverlyOShea.