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Today we’re going to jump in on ways you can adjust your finances during the coronavirus crisis to get through these tough times!
Getting Your Finances Stabilized During the Coronavirus Crisis
Even though it’s been less than a month since schools closed here in Raleigh, it feels like a lifetime ago.
And chances are things can feel that way to you.
I truly hope that you’re doing well and that you’re able to work remotely or at least have some steady income coming in. However, I know from emails that some have seen their hours drastically reduced, they’ve been furloughed, or they’ve been laid off.
It’s tough to figure out the next steps when we’re in the middle of things, but there are ways we can prepare and pivot to get through these financially tough times.
Joe Mecca, VP of Communication at Coastal Credit Union has been out there letting those in the community know what resources out there.
Today he’s on the show to discuss things you can do now and over the next few months.
In this episode, we’ll get into:
- Figuring out how to reprioritize your budget
- How much of a financial cushion should you have with these certain times
- Where to look for relief programs (more than just the CARE Act)
Let’s get started!
Resources to Easily Stay on Top of Your Money
Here are some resources we mentioned in the episode as well as some other handy articles to check out:
- Best Budget and Money Apps: Personal Capital, Tiller, Mint, Honeyfi
- Grow Your Stash Faster: High Yield Savings with CiT Bank
- Jumpstart Your Marriage and Your Money
- Your Money: A Hub for Help During the Coronavirus Crisis via The NY Times
- COVID-19 Financial Relief Info for Those Impacted via @ I Heart Budgets
- Want me to answer your questions about coronavirus and your money? Send them in here!
- JustShelter.org – Community resources for help with housing
Thank You to Our Sponsor Coastal!
Support for this podcast comes from Coastal Credit Union. If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today!
We’ve been Coastal members for a few years have been happy with their services.
If you're a member and you've been financially affected by the coronavirus, Coastal has a member assistance program to ease the burden.
How to Reprioritize Your Budget
Let’s jump right in to the big issue that is stressing out many families – how are we going to pay our bills?
We’re grateful to still be able to work remotely, but that isn’t the case for all. Some industries like restaurants, hospitality, and service have seen been hit hard, with many losing their main source of income.
I was reading that in the week that ended March 28, over 6.6 million people filed for unemployment.
So if you’re in that situation where you are looking at struggling to budget, how do you prioritize what bills get paid?
It was about focusing on two goals for the month – paying your essentials (roof over your head, food, utilities) and building up your emergency fund if you didn’t have at least 3 months stashed away already.
And I do believe that they should be your priorities, but with some relief options being offered by lenders, protections from states and the CARES Act, Joe points out a path you can use in your budget.
Joe Mecca: I know you've got listeners all over and the approach is probably going to vary by state because there's been a lot of action in different different state to state.
But I'll speak from how things might work in North Carolina right now. You're you're not gonna see evictions, you're not gonna see foreclosures, utility shut off those. Those aren't happening in the short term. That's by order of the governor.
And that's gonna be some good protection for consumers, for families in the short term. You know, prior to that, Coastal had already paused any foreclosure proceedings, any repossessions on cars.
We did that immediately knowing that people were gonna come looking to us for help.
Elle Martinez: And if you're not sure what your state is currently offering as protections or benefits with the current crisis, go ahead and check out your local news channel.
Many of them have been running the press conferences and briefings by state governors and other government officials are giving.
Their sites do have links to the relevant government agencies in programs that they mentioned on air.
Prioritizing Which Bills to Pay
Joe Mecca: Some point those orders are going to expire and people are going to have, you know, a backlog of bills.
So I must say, everyone's person or each person's individual priorities are probably going to differ. So if you're trying to prioritize your bills, you know, what's the most important thing for you to keep going?
What's going to be the easiest for you to recover from? And then what's not productive in the short term?
Elle Martinez: To give you some examples, let's say that in your state, utilities can't be cut off. However, you're still going to be responsible for the bill. So working with your provider, you may consider sending you a partial payment.
You might also consider pushing it out until your paycheck or unemployment check comes in. That could give you enough buffer so you can take care of the rent and groceries.
Or let's say your mortgage lender offers to defer. You can then take what you would have put towards your mortgage, towards other essentials, or perhaps buffering up your emergency fund.
The idea is to take advantage of whatever relief you can find now to stay on top of those essential bills. Being bogged down when things get back to normal, however long that might be.
Relief Programs for Those Impacted By Covid-19
The CARES ACT is in the headlines, but you may not be familiar with the provisions in it so I just want to highlight some ways it may help you in the short term along with any related assistance that can tie it with it.
- Federal Housing Finance Agency informed companies that service mortgages owned by Fannie Mae/Freddie Mac allow the option to delay payments (up to 12 months) due to financial hardship from fall out of coronavirus.
- FHA loan: Temporary stop on eviction and foreclosure nationwide
- Unemployment Benefits: Until July 31, unemployment benefits will be increased an additional $600 weekly. It also lengthens benefits time up to 13 weeks beyond your state’s time period.
- Utilities: This is kind of a patchwork. It depends on your provider. dories, where they've done the extending the payments or delaying the payments with no fees. I've also seen where they're trying to give a refund to certain customers early from programs like energy savings to help out. Call check out their Web site and see what relief options they have available for you.
- Food: Some state’s health and human services are trying to ease access for programs like Supplemental Nutrition Assistance Programs. Local food banks are expanding services too. If your family is in need, please consider using these resources
- Student Loans: If you have a federal student loan, you should be getting an administrative forbearance, allowing you to skip payments until Sept. 30 without accruing interest. Private lenders are offering assistance by it varies by lender and they stipulate you have to contact them to verify that you are experiencing financial hardship.
- Credit Cards: Finally, a concern many in the community are having is. Dealing with your credit cards, you may be worried that if you don't pay your credit cards. Not only is your credit score affected, but you're going to be hit with a ton of fees. First of all, I completely understand the stress. However, there are a few things I want you to consider. Can with your budget pay the minimum, then go for that? It'll protect you from having your credit score hit by a missed or late payment, but your main concern, of course, should be the essentials. And the second thing to consider is that credit card company. Are starting to offer some relief options. It could be a deferred payment. It could be of a reduced interest rate. But I haven't seen any credit card company put out some automatic relief program. You're gonna have to call them and see what you can work out. Run the numbers before you call. Let them know what you can pay right now and be firm on that.
Those are the main programs I've seen, but one resource that has been helpful for me is this guide from The NY Times. They have a team working to keep up with developments.
As you can see, even though there are some provisions that are built into the CARE Act, you still have to do some legwork. But it can be a huge relief to your finances and your stress levels, say if you find yourself struggling.
Contact Your Banks and Credit Unions
Joe Mecca: Contact your lenders. Contact your billers. Find out how they're willing to work with you. Are you able to spread out a bill over future months?
Are you able to restructure alone or something like that? We're getting a lot of requests right now. We're actively working with our members to provide emergency loan relief and to restructure a lot of loans. People are struggling for the next 60, 90, 120 days, whatever it might be.
We're able to try to rework some of that in the short term to keep some clients. It's not going to negatively impact our credit reports or anything like that while giving them a little breathing room in the short term.
How Big of an Emergency Fund Should We Have Right Now?
Elle Martinez: Speaking of breathing room with a lot of uncertainty, having a financial cushion is even more important. Some questions I've received fall into two main categories. One, how do you save with a tighter budget and 2, how much cushion is enough? You know, the general rule of thumb is three to six months. But during a mass. Really enough for families to have stashed away, so it's tough when you're right in it.
Joe Mecca: There's a lot of times people who've got that solid emergency fund who are going to be using it right now. I would say, again, start with the people who might be in decent position if you still have the means to keep saving. Keep following your plan, because we don't know how long this is going to last. We don't know what our future impacts are going to be. People who might be OK today might not be OK in a couple of weeks. So if you if you're following a plan and you still have the means to contribute to whatever type savings you're doing, keep doing that. Things are a little bit tighter. You're seeing a little bit of, you know, Christine, reduced income of your income's gone away, but you've got some cushion. You focus that cushion on the essentials. And a lot of us have seen that. You know, again, we talked about before, the discretionary spending is really that's gone away. So that should give people a little bit more cushion on some of those are discovering how much discretionary we actually had built and/or our spending.
I think that's been an eye opener for a lot of people.
Helping Ourselves and Our Neighbors Through These Tough Times
Elle Martinez: I absolutely agree with Joe. If you can shift what you were spending, for example, on the commute – you no longer. Into your savings and build that emergency fund as much as you can. And if you're expecting a stimulus check and you're able to pay the bills right now, but your savings is a little low. Go ahead and buffer that up with the. You are in a fortunate position where you are still working and you do have some savings in your account. Consider taking the opportunity to help others.
Oh, and this is for everybody. But, you know, some of us a lot of us are still working, still have some sort of income coming in. And we've now seen that discretionary spending go away. So we're able to pay our bills and we don't really have anything to spend that extra money on saving. It's a great idea. But there are a lot of people who are in need right now. And I would suggest you're looking for those worthwhile charity opportunities. There are some great things going on in the community right now.
I know from your coastal perspective, which is our foundation just gave large grants to United Way Rapid Response Fund. They're doing a lot of good things in the community.
The food service restaurant industry has been particularly hard hit. We gave one hundred thousand dollars to the restaurant workers really fund. And I'm encouraging people to go to that Web site and also contribute to that if they can. The things we can do to kind of help soften the blow for the rest of us. Well, I think overall help all of us come out of this a little bit better and a little bit faster on the back end.
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