Money Management during COVID-19
Government officials are working toward relief plans and stimulus packages to minimize the health and economic impact of the Coronavirus. In the meantime, what can you do to protect your money and financial well-being? Here are a few of our suggestions for money management during COVID-19.
Create an extended budget
As of the writing of this post, the CDC is recommending that social distancing continue until May 11th. While this could change, it will be important to strategize for the next 6-weeks. While you are at it, you might as well just budget through May.
Once you have created an accurate and detailed budget, determine if you will be able to cover financial obligations. If you will be unable to make payments, here are a few steps to take.
Always start by prioritizing your family’s needs. During COVID-19 your money management needs to reflect your priorities. Do what you can to ensure you have enough money to keep a roof over your head. Don’t forget food on the table, clothes on your back and essential transportation. Non-essentials and payments on debt, come after basic needs are met.
Be honest and direct with lenders
You need to keep open communication with lenders, service providers and landlords. Federal programs are being put in place to assist those who are experiencing a disruption in income. However, it will be important for you to be proactive. Many credit card companies have programs in place to help their customers get through this difficult time. Give customer service a call and ask what programs are available to assist you. This will help you keep your account in good standing. It will also protect you from having delinquent payments reported to the credit bureaus which will then have a negative impact on your credit score.
Assess your student loan strategy
From March 13th to September 30th, federally held student loans are being automatically put into administrative forbearance and all interest fees are being waived. If it is possible to maintain regular payments on your student loans. Contact your loan servicer or their website to find out how to continue making payments. This is a great option since your entire payment will go to the principal balance for the next 5 months.
If you cannot continue to make normal payments, administrative forbearance means that your payments will stop. However, your account will not become delinquent. While in forbearance, your account will also not accrue any interest.
If you have any questions about your student loans and administrative forbearance, reach out to the organization with whom you make your monthly payments. Additionally, this information may change as legislation does.
Find more details and information on the Federal Student Aid website or continue checking back here and we will do our best to keep this blog updated and accurate.
Do a little analysis
Since we all have some time on our hands, it is a good time to review our credit reports (all 3 of them) and look for any discrepancies or misinformation. Addressing any incorrect information or items that were misreported can impact your credit score or even indicate that you have been a victim of identity theft. Additionally, we want to make sure that you know you should never pay for your credit report. You are entitled to a FREE annual report from the 3 main credit bureaus each year. Get all 3 of your annual reports from this government authorized website.
Have your guard up – especially when it comes to your stimulus check.
Be highly cautious of scams right now. Unfortunately, some view crisis situations as an opportunity to make a quick buck. For instance, while Americans wait on their stimulus checks to arrive, many scammers are busy at work trying to con people out of their money. According to the Federal Trade Commission and FEMA, any offers, websites, e-mails, texts etc. that say they will get you a check is a scam. Most Americans do not have to take any action to receive their stimulus check as they will be mailed or direct deposited same as your tax return. More detailed information can be found on the Federal Trade Commission or the IRS website.
Finally, the Federal Trade Commission is expecting an escalation of scammers targeting seniors currently following social distancing suggestions. So, if you or anyone you know has been getting strange e-mails or phone calls, be extra careful and help keep each other well informed.
Here are some more tips about how to mange your finances during Covid-19
Need help creating a financial plan to get you through these uncertain times?