As many anxiously watch the market and tighten their belts to weather an uncertain financial future, approximately 45% of Americans do not have the financial resources to take care of a $400 emergency bill, according to the Federal Reserve's 2018 Survey of Household Economics and Decision Making.

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With cities across the U.S. closing gathering places, canceling events, and imposing dine-in restaurant and bar restrictions in response to the COVID-19 pandemic, many people are finding themselves temporarily unemployed or facing limited incomes.

Richard Rosen, an associate professor of personal and family financial planning and interim director of the Take Charge America Institute for Consumer Financial Education and Research in the University of Arizona's Norton School of Family and Consumer Sciences, talked about personal financial strategy and provided advice for those looking to put their best foot forward.

Q: For those shouldering extensive credit card debt or substantial car payments, what proactive steps can they take to put themselves in better financial standing?  

A: Right off the top, look at your credit card debt. Most everyone is holding debt on a credit card, and as of February 2020, the average credit card interest rate is 21.21%.

If there is still incoming employment income, look to start paying down that debt as fast as possible. The most effective process is to, first, make sure to pay the minimum payment on all of your credit card accounts. Then, start the process of paying down the debt on the most expensive credit card first; pay as much extra money as possible toward the account with the highest interest rate. Once that card is fully paid off, start paying as much as you can on the credit card with the next highest interest rate, and so on and so on, until all cards are paid off.

On the other hand, if you have racked up a lot of credit card debt and you are concerned about income, transferring the balance to a low-rate card may be beneficial. This should help pay down credit card debt faster, since more of the monthly payments will go toward payments of the principal balance instead of toward interest charges. There are limitations and restrictions, so if this is the path you have chosen, carefully review the underlying terms and conditions.

Finally, this same concept with credit cards might be available for car and truck loans. Again, this is not for everyone and there are clearly some underlying issues, but maybe it is time to look to refinance a vehicle loan. Refinancing an auto loan might lower monthly payments by lengthening the term of repayment, or should lower interest rates be available, it could lower the monthly expenditures for paying the loan itself.

Q: As many are facing loss of income or limited finances, what's the most important thing to keep in mind when deciding which bills to prioritize?

A: When piecing together a list of bills, look to those which offer critical life requirements, such as food, shelter, heat and A/C, medical, et cetera. Anything else, sorry to say, is discretionary and most likely worthy of eliminating. Taking each one individually, let's look at food. Off the top, lower expectations of food quality, and start to shop at the very low end of the food vendors and suppliers. Secondly, become familiar with food banks and other such organizations providing opportunities for periodic distribution of food. I know it may seem embarrassing in some situations, but swallow that pride. It is very important to understand: No one is looking down at you, and in most every situation, this is temporary.

The second critical life requirement is shelter. If you are lucky enough to own your home, or should you be leasing your home, it is critical to be proactive. Make a valid effort to talk with your lender or your landlord. They clearly know and understand the hardships people are going through, and they want to help in any way they can. It is important to understand that it is time consuming and expensive to either foreclose or evict someone from their home. When you approach the lender or landlord, have a plan. Make a point of explaining your situation – that you are presently looking for replacement income and upon getting back to work, you have every expectation of paying all amounts due.

Now, can you eliminate expenses? A couple of suggestions include insurance – increase co-pays and deductibles of all types of insurance; transportation – you may need to consider giving the automobile back to the dealership and try to get out from underneath the loan or sell the vehicle to a third party; or recreation – sorry, get rid of the gym membership.

Q: If individuals find themselves in a place of being unable to make ends meet, what can they do?

A: Income replacement can be helpful, regardless of how small the supplemental income might be. The most obvious is filing for unemployment, assuming you qualify. Other such things are to look for day and hourly work. While this is not ideal, any incoming money can stem the tide of a rapidly draining savings account. A few other possibilities might be crowdfunding, grants and small loans through credit unions, local banks, et cetera.

Q: Financial advisers recommend having a savings to cover expenses for three months in case of emergency. What can people do now to put money away and build a savings?

A: One of the most important recommendations made by financial advisers, financial blogs and websites, and pundits on television is to always have an emergency fund. An emergency fund is money set aside to cover unexpected expenses – medical bills, car repairs, home repairs or property damage – or any financial emergency – loss of job, family emergency, et cetera. In the best of times, it is important to maintain a fund of at least three to six months of general expenses.

As you prepare to start an emergency fund, it is critical to establish a savings goal. The ideal amount for an emergency fund is different per person; it will depend on a number of factors, including current income, costs and bills, lifestyle, size of family and other dependents, and job security. As far as investing the funds held in an emergency fund, remember it is for emergencies and as a result, it must be very liquid – cash or cash equivalents – and deposited in an account that provides for immediate access.

Q: What advice do you have for those who may be watching retirement and investment funds falter?

Virtually everyone has lost value during the past three or four weeks. To say the equity markets have been volatile is an understatement, and for the most part, every single investment sector has lost value. Notice I said lost value and that I did not say lost money. Because until you sell an asset that has suffered a decline, you have not lost any money. I know it is really hard not to be depressed when one reviews their brokerage statement or retirement statement. But unless you are in immediate need of money from invested assets, why are you reviewing your financial statements? The best course of action is to continue to make investments – dollar cost averaging – particularly if you are investing in an IRA or 401(k). Essentially, you are purchasing the same investments you purchased four weeks ago, just one heck of a lot cheaper.

I know it is a lot easier said than done, but should an investor make the decision to ride it out, a couple of things must be taken into account. One: Don't watch the market. It won't change simply because you want it to. Two: At every opportunity, buy into the market. It is really cheap right now, and those investments will look like champions when the market takes off. Three: While an investor takes advantage of cheap equities, it is also critical to build on that cash fund.