Financial Wellness

Protect Yourself Financially During the Coronavirus Pandemic

List of resources to help you cope with uncertainty.

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Protect Yourself Financially During PandemicThe pandemic is testing both our physical and financial health. This is definitely uncharted waters as we’re living with heightened concern over our health and worry about our finances. As we continue to progress through this new reality, it brings forward financial uncertainties around our job and income.

I will continue to update this resource page with new information and resources.

For concerns about the virus and health tips, please visit the Centers for Disease Control and Prevention website. For information on US Government federal response, visit coronavirus.gov. And the New York Times has created a coronavirus impact hub that is quite extensive.

To determine, if you’re eligible or will receive a federal stimulus check, check the Washington Post calculator.

The CARES Act was signed by the President and has extended specific benefits to businesses, workers, and programs that are federally backed (i.e. student loans).

Prepare and protect yourself financially with these resources and tips.

Utilize your employee benefits

Communicate with your managers and the Human Resource department about your benefits. Take the time to understand the changes in your benefits and policies. My HR contacts have shared they are updating policies due to the pandemic and informing employees. If you don’t know what’s happening, then ask specifically about the following programs:

  • Health insurance coverage with reduced hours
  • Policy for furloughed employees and access to health benefits
  • Sick time and leave of absence policy changes

Are you feeling stressed and want to speak to someone? Many employers offer Employee Assistance Programs (EAPs) with counselors that are available 24 hours a day. I’ve used EAPs in the past allowing me to speak to a counselor about a personal stressful situation.

Contact your primary care provider and hospital

This is about being proactive so you understand how your doctor and local hospital are taking in people who may show coronavirus symptoms. Don’t wait until the very last minute to get a hold of your doctor. Know the process, write it down, share with your household, and post somewhere visible.

Some doctors are proactively communicating with their patients. My doctor, for instance, sent an email, Facebook post, and updated their voicemail greeting with instructions.

If you are concerned about your health insurance, contact your health insurance provider as they may have additional tips and resources.

Understand that this is an extremely busy time for doctor offices, hospitals, and insurance companies so you may have a bit of a wait when calling. You can also review their websites for updated information.

Contact your bank or credit union or banking app

Financial institutions want to help customers during the pandemic. Here are some tips:

  • Go to the website and review their coronavirus response or message. I’ve reviewed over 50 large and small financial services companies and all have messages on their homepage.
  • Use the mobile banking app to monitor your finances and complete transactions you might normally do over the phone or in a branch.

The FDIC and CFPB have encouraged financial institutions to work with customers.

Many banks are waiving monthly service fees, ATM withdrawal fees, overdrawn fees and penalties for early withdrawal from Certificates of Deposits (CDs)

Note: Wait times are extremely high so be patient. Many offer relief automatically. Others require an email or completing a simple online form. While a few require you to call them and wait to speak with a representative.

Contact your credit card company and lenders

If your work hours are reduced or you’re unable to pay your bills, be proactive and speak with your creditor or lender. Let them know what’s happening and what options are available.

Some creditors and lenders are offering to:

  • Delay or skip payments on your car and personal loan, not reported late on credit reports.
  • Defer credit card payments without a fee and not reported late on your credit reports.
  • Lower credit card APRs to reduce the minimum monthly payment.
  • Waive fees such as late fees or over-limit fees on credit cards
  • Access to emergency loans with no payments for 1-3 months.

Be proactive. It will be helpful to calculate your cash flow. Your cash flow reflects the money in and out on a monthly basis. This helps determine if your income can meet your monthly expenses and debt payments. Having this information can help you articulate to the representatives why you need assistance.

If you’re not successful the first time around, try calling again in a few days. Financial institutions are figuring out how to respond to the pandemic as well. They may not have a program available today but may have one tomorrow.

Student loan options

With federal student loans, changes to your employment status can mean qualifying for Income-Based Repayment. This can lower your minimum monthly payments significantly on your federal student loans. And you may also qualify for forbearance or deferment. Contact your student loan servicer about what options are available and ask specifically about IBR.

With private student loans, contact your servicer and inquire about financial hardship programs or any pandemic related options to lower or defer your payments.

With the CARES Act:

No federal student loan payments. Through September 30, 2020, your federal student loan payments are suspended. This is an automatic suspension and no action is needed from you. You will not incur any late fees or penalties. It will not be reflected on your credit report.

No interest on your federal student loans. The interest rate on federal student loans is automatically set to 0% through September 30, 2020. After this date, interest will revert back to your regular rate. This means no new interest will accrue during this period.

Note: During the payment suspension, you can continue to pay your federal loans if you choose to do so. Payments made during this time will pay off any prior accrued interest or fees, then apply to the principal balance.

No garnishment of wages or benefits. If the federal government garnishes your wages, it will not collect through September 30, 2020.

Public service loan forgiveness. The payment suspension period counts as part of your required 120 payments to qualify for loan forgiveness. You can pause your payments and the non-payments will still count towards that 120 requirements.

Income-driven repayments. If you’re enrolled in any IDR plans, the suspension period will also count towards your 20-25 year cancellation of the remaining balance.

Employers can pay off student loans. Through December 31, 2020, your employer can pay up to $5,250 of your student loans tax-free.

Federal Response #1: “All borrowers with federally held student loans will automatically have their interest rates set to 0% for a period of at least 60 days. In addition, each of these borrowers will have the option to suspend their payments for at least two months to allow them greater flexibility during the national emergency. This will allow borrowers to temporarily stop their payments without worrying about accruing interest.” – US Department of Education

Federal Response #2: The new bill extends automatic payment suspensions for any student loan held by the federal government. It states no interest shall accrue during the suspension. It’s challenging to get a hold of any loan servicers at the moment, so check your account online within the next few weeks. You should receive notice about your federal loans but you can also continue to keep paying down your principal if you choose. After August 1, notices will be sent indicating the suspension period will end on Sept 30. Your other option is to enroll in an income-driven repayment plan.

Note: During the suspension, each month will continue to count towards your progress towards Student Loan Forgiveness.

Note: Private loans or student loans not held by the US Government are not eligible. Contact your loan servicer directly about their specific programs.

Consideration: With the Federal Reserve cutting rates to zero, interest rates have gone down significantly. For those considering refinancing, you might benefit from student loan refinancing. However, understand that any federal waivers, benefits or potential bailouts may not apply to you after refinancing with a private lender.

Retirement Accounts

For the calendar year 2020, no one would have to take a required minimum distribution from any individual retirement accounts or workplace retirement savings plans, like a 401(k). This way you’re not forced to withdraw money from accounts that have lost value.

Additionally, you can withdraw up to $100,000 this year without the usual 10 percent penalty, as long as it’s because of the outbreak. There’s no penalty but taxes are still applicable. However, you would be able to spread out any income taxes that you owe over three years from the date you took the distribution. This only applies if you’ve been impacted by the coronavirus in some way like a diagnosis or loss of a job.

Housing – Mortgages

Contact your mortgage provider and servicer about specific programs offered because of coronavirus pandemic.

Federal Response Update: Federal regulators, through the mortgage giants Fannie Mae and Freddie Mac, are ordering lenders to offer homeowners flexibility. Check Freddie Mac and Fannie Mae releases for more information. This includes:

  • Providing mortgage forbearance for up to 12 months,
  • Waiving assessments of penalties and late fees,
  • Halting all foreclosure sales and evictions of borrowers until at least May 17, 2020,
  • Suspending reporting to credit bureaus of delinquency related to forbearance,
  • Offering loan modification options that lower payments or keep payments the same after the forbearance period.

Note: All Fannie Mae, Freddie Mac, and FHA backed loans have announced a foreclosure and eviction moratorium for the duration of the pandemic.

If you’re impacted by the pandemic and having difficulty getting assistance from your lender or mortgage servicer, speak with a trained professional and get advice about your options and help with negotiating on your behalf.

  • HUD-Approved Housing Counselors. The U.S. Department of Housing and Urban Development (HUD)-approved housing counselors can discuss options with you if you’re having trouble paying your mortgage loan or reverse mortgage loan.

Consideration: Mortgage rates are at an all-time low. If your gainfully employed and have good credit, refinancing might be a good option to lower your monthly payments into the foreseeable future.

Housing – Renting

Be proactive with your landlord if you cannot make rent because of changes to your employment due to the pandemic. Be ready to discuss your finances and a date for when you can resume paying rent.

There are also short-term rent assistance programs offered by local charities. Do a search for a local chapter of the Salvation Army, Catholic Charities, Urban League, and Modest Needs to name a few. Also, contact your city housing services for a list of programs and nonprofits offering emergency rent assistance.

State and Local Response: Due to the pandemic, many states and local municipalities have placed a stop on evictions, but landlords can still file an eviction order.

Federal Response: The CARES Act puts a temporary, nationwide eviction moratorium in place for any renters whose landlords have mortgages backed or owned by Fannie Mae, Freddie Mac, and other federal entities. This will last for 120 days after the bill was signed on March 27, 2020. Landlords can’t charge any fees or penalties for nonpayment of rent.

HUD: The Department of Housing and Urban Development has an additional $17.4 billion in funding for rent assistance, housing vouchers, public housing and housing for the elderly.

Resource: If you rent, a national resource with a search-by-state function is on Justshelter.org. The service offers information on local organizations providing advice to renters in distress.

Utility, phone and internet companies

Many utilities (water, electric, gas) and cellphone companies are waiving late fees or offering free services to accommodate consumers who might be struggling during the coronavirus pandemic.

Companies like Comcast, PG&E, AT&T, Hyundai and Duke Energy are among the businesses giving people a break, in one way or another. Read more on USAToday.

If you need help with making a payment, search online for local charities, churches, and groups that provide assistance. There are many and grateful they exist.

Note: Utility companies have stated they are not shutting off services during this pandemic if you’re unable to make payment.

Federal Response: The new bill does not make it illegal for utility companies or internet companies to shut off service for nonpayment

Resource: Find local social services programs to help you with your bills. The website that’s helpful is auntbertha.com.

Unemployment benefits

State and local governments vary in unemployment benefit programs and offerings. Recently, governors have made orders that are aimed to help during the pandemic and anyone impacted by the coronavirus. Look at your state’s unemployment policies.

Federal Response: The new bill would wrap in far more workers than are usually eligible for unemployment benefits, including self-employed people and part-time workers. The amount of unemployment benefits you get depends on your state. Under the CARES Act, eligible workers would get an extra $600 per week on top of their state benefit.

Filing taxes and paying taxes owed – Federal

Federal Response Update: The tax filing deadline has been extended to July 15, 2020. “The IRS moved the national income tax filing day ahead to July 15, three months after the normal deadline for Americans to send in their returns.” Read more >>>

Consideration: If you’re receiving a refund, file as soon as you can to get the cash sooner.

On March 17, 2020, Treasury Secretary Steven Mnuchin said taxpayers can delay paying their income taxes on as much as $1 million in taxes owed for up to 90 days. Basically, if you owe taxes, you’ll receive a 3-month reprieve to pay income taxes owed after filing. Read more on IRS coronavirus response.

Filing taxes and paying taxes owed – State

Some states have rolled out delays due to coronavirus. Check with your state. The American Institute of CPAs is keeping a list of states’ tax developments here. And popular tax preparation providers have updated their software to reflect these changes too.

CARES Act Financial Assistance

Benefits of up to $1,200 per adult individual ($2,400 for couples filing jointly) and $500 for each child 16 and under will automatically be sent in April 2020. To receive $1,200, your AGI for 2019 0or 2018 must be $75,000 ($150,000 for couples). The amount decreases as your income increases.

Protect your financial identity

Be on high alert as scammers thrive in uncertain times. I’ve personally received a few phone calls, text messages and emails from scammers. These include paying for access to government grants, threats to close my social security number, and IRS taxes scam.

Be very cautious of email, text messages or social media posts asking you to click a link and enter your personal information. Learn more about how to protect your financial identity.

Credit Reporting

The new bill states that during the period beginning on Jan. 31 and continuing 120 days after the cessation of the national emergency declaration, lenders and others should mark your credit file as current, even if you avail yourself of payment modifications.

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Jason Vitug

Jason is the founder of phroogal, creator of the award winning project Road to Financial Wellness, and author of the bestseller and New York Times reviewed book, You Only Live Once: The Roadmap to Financial Wellness and a Purposeful Life.

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