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What we are seeing in our economy is like nothing most of us have seen in our lifetimes. Thankfully there are lots of resources available to help individuals and business owners and I would like to share some tips that have been helpful to my family as well as many others that I have shared them with. Most importantly, be proactive as most of this will not come to you automatically.
File for Unemployment
If you have lost your job or had a reduction in income, donâ€™t let your pride get in the way of filing for unemployment. I will share that I had to do this one time in my life. Many years ago when my wife was ill and the company I was working for was sold, I was laid off during a very tough economy. It was a hard thing for me to do, but someone helped me realize that I had paid into the system all of my life and have done so since (we donâ€™t have a choice) so I was just filing an insurance claim on a premium I was forced to pay. The good news is that due to the coronavirus outbreak, the government is offering up to an additional $600 per week in unemployment benefits for up to 39 weeks. It also applies to part-time workers, contractors, gig workers, and self-employed workers (which is rare). Check with your state unemployment office to start the process.
Zippia (a job/career website) has also put together a resource that shows that maximum unemployment benefits by state, along with some resources for finding remote work – which is probably more on people’s radar now more than ever.
Ask for Financial Relief
If your income has been impacted by a layoff, furlough, business loss, or any other financial loss, you need to communicate with anyone who is expecting money from you sooner rather than later. Many lenders, landlords, and service providers are offering help in terms of payment forgiveness, BUT they wonâ€™t know that you need it unless you ask. Here is a list of potential providers to reach out to:
- Mortgage Company
- Landlord (see our article titled, “What to Do if You Can’t Pay Your Rent Due to the Coronavirus Crisis“)
- Car Loan Company
- Credit Card Company
- Student Loan Servicer
- Cable / Internet Company
- Cell Phone Provider
- Insurance Company
- Utility Companies
My wife and I have received almost $700 in payment relief this month, some of which came without asking (our car insurance rebate and our gym membership), and the rest was either deferred or forgiven just for asking.
Reassessing Your Budget
Most of us have seen certain reductions such as the cost of gas, haircuts, and eating out, only to be replaced by the cost of buying more groceries than ever. I know in our house, we typically keep enough food for a week, so for us, it was a big wake up call and we ended up having some much larger than normal grocery runs. Here is a list of areas to reassess in your budget:
- Cable TV. Maybe you need it now more than ever since you are home, but perhaps youâ€™ve got Netflix or some other streaming service and you donâ€™t need the extras right now?
- Cell Phone Plan. If you are not using your plan as much (in particular data), you might want to consider switching to a lower plan as long as there is no penalty for doing so. (TIP: You could also call and ask for a payment reduction for a month if you are using less. Thatâ€™s what I did and saved over $100!)
- Haircuts. My wife has tried to get me to stop going to Great Clips for years. Well, she finally got her wish (at least for now) and she did a decent job in cutting my hair. I have saved roughly $60 so far for the cost of the clippers ($24 or slightly more than the cost of one haircut with tip) You might find that you enjoy these savings, but I will be going back to Great Clips once I can. They do a great job!
- Doing Your Own Home Services. At one time, I paid for a landscaper and pool service, but I currently cut my own grass and (for now) handle the pool stuff which saves roughly $160 per month. I have to say pool chemistry can be tricky, so I will likely start paying for that again. (Note: I live in Arizona, we all have poolsâ€¦)
Getting a Coronavirus Stimulus Check
If you make under a certain amount of money, you will likely qualify to receive a stimulus check from the IRS. In fact, many people have already received them. The figure is $1,200 for individuals who earn up to $75,000 and $2,400 for couples who earn less than $150,000 combined and file a joint tax return. There is also a $500 stimulus per dependent child and if you earn above those figures, the amount will be reduced to a certain point at which it is cut off.
To receive this money you must have filed your 2018 taxes at a minimum (since 2019 is not due yet). There is a website to check the status of your stimulus check AND provide your direct deposit information so you can receive it faster via direct deposit.
If you get the â€œPayment Status Not Availableâ€ error, keep checking back daily as they are continuing to update the site. It took at least a week before my info showed up, but I was able to update the direct deposit info just two days ago, so I expect to see the money by next week. (Tip: I heard many people saying that it did not work until the entered their address in all caps, so if you have to try again the next day, try using caps for the address… it makes sense as the GOV has some dated computer systems.)
Speaking of the stimulus check, please be aware that (sadly) there are lots of coronavirus stimulus payment scams out there. Do not respond to any text messages, calls, emails, or social media messages about stimulus checks as the IRS will not text you, call you, email you, or contact you via social media. Also, do not participate in any stimulus advance programs as these are people just looking to steal your money.
Check for State and Local COVID-19 Relief Programs
I started to build a list of all of the states offering help, and then I realized that help was also being offered at the local level. For example, here is a list of resources for those living in Phoenix. My recommendation is to do a Google search for:
â€œCOVID 19 Relief Program in Your Stateâ€
â€œCOVID 19 Relief Program in Your Cityâ€
You might be surprised to see the additional help being offered by local governments and nonprofits.
Cautiously Tap Into Savings
This is kind of what your savings are for. I say â€œkind ofâ€ because we expect to cover our own emergencies; not international pandemics. That being said, if you are a saver, you are likely in better shape than those who are not savers. Having savings will allow you to stress less in times like these, but if you donâ€™t have savings, donâ€™t let that cause any undue stress. Just make a commitment to build your savings once this is all overâ€¦ and it will be over soon enough.
VERY Cautiously Tap Into Your 401k or Other Retirement
Due to the CARES (Coronavirus Aid, Relief, and Economic Security) Act you are able to take out an early withdrawal from your retirement without the 10% penalty. You are still subject to paying the taxes on it if you donâ€™t pay it back, however the taxes can be spread over 3 years. I strongly encourage you to consult an accountant on the tax implications before doing this. Taking money from your retirement – especially if you are not planning on paying it back – should always be a last resort.
I hope that helps. There are lots of programs and they have all evolved and continue to change, so if something I listed is no longer available, I do apologize. My goal is to share the best resources I know of.
If you know of any other resources feel free to share in the comments and if you have any questions, you can post them there as well. You can always contact me directly also.
Wishing you and your family health and wholeness!