I am here to provide you insight into what I am observing when it comes to COVID-19 and the impact it could have on your financial well-being.
We cannot let this virus control our lives and our emotions. Yes, this unchartered territory can create anxiety. This may mean that you need to turn off your news notifications or temporarily delete your social media, so you aren’t fueling the fire. It is important that we stay connected to what is happening in the world, but we must practice moderation.
You should be aware of the following when it comes to COVID-19 and your personal finances:
- Do not check your 401(k) or any other retirement accounts. No matter how into the stock market you are, just don’t do it. You are fueling the fire. Historically, very few people have success in timing the market. Getting out now is no guarantee of reducing losses. Further, getting the timing right on getting back in will become incredibly crucial and give you SOMETHING ELSE to worry about. For young people, the key is time in the market and not timing the market.
- Although most of us are grateful to still have our jobs, some Americans are truly suffering right now. This unchartered territory tests our liquidity needs and the importance of having an emergency fund. If you look up emergency fund, most sources will tell you anywhere between three months to a year’s worth of expenses should be reserved for an emergency. But, like I’ve said in my posts before, everyone’s income and expenses are different, so this recommendation should be taken lightly. You should consider your circumstances when thinking of this magic number.
- Last week, U.S. Secretary of Education Betsy Devos announced that the office of Federal Student Aid is executing on President Trump’s promise to provide student loan relief. All borrowers with federally held student loans will automatically have their interest rates set to 0% for a period of at least 60 days, as of March 13, 2020. In addition, each borrower will have the option to suspend their payments for at least two months. This allows borrowers to stop their payments without worrying about accruing interest. To request this forbearance and any further questions, you will need to contact your loan servicer online or by phone.
- This could be a good time to consider refinancing your mortgage. Keyword: consider. You will need to make sure you have enough emergency cash. It is in your best interest to speak to a fiduciary financial professional about your circumstances to figure out if this is a good option for you.
- If you are having trouble making ends meet, such as your car payment, mortgage, rent, etc., please contact the bank you are financing these loans through. If you are worried about your rent payment, contact your landlord. Companies are providing breaks for those impacted, but you can’t expect a handout. You must put in an effort and contact these people. If you are unable to pay your credit card bill due to job loss, call and ask for a deferred payment. Most companies are offering no interest and fees during this time. Make sure you ask for some form of proof when granted deferment or forbearance.
- If you lose your job, file for unemployment!
- You will need to visit your state of residence’s DOL website for more information. If you are a Georgia resident, use https://dol.georgia.gov/blog/new-information-filing-unemployment-partial-claims-and-reemployment-services to begin the application process.
- If you are part of the bar industry, consider applying for grant through the U.S. Bartender’s Guild. Please visit https://www.usbgfoundation.org/covid-19-response for more information.
- The IRS moved the national income tax filing day to July 15th, three months after the normal deadline. During this three-month deferral, taxpayers and businesses will not be subject to interest and penalties. You still need to submit your tax return as early as possible, especially if you are due a refund and need the cash.
A source that many individuals are unaware of is the Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) programs. I have worked for this program, and it is a fantastic resource for free tax help for low- to-moderate income families who need assistance preparing their tax return.
You will need to check if your local VITA/TCE center is currently open.
Find your local VITA/TCE center: https://irs.treasury.gov/freetaxprep/.
We cannot control this virus, but we can control how we react.
As we continue to face uncertainty during these tough times, we must work on what we can control and practice gratitude. There is nothing great about the circumstances we are currently facing, but practicing gratitude will allow us to cope better with our stress. Our daily routine runs on technology, so facetime your friends and family! Make an effort to not talk about the economy or COVID-19. Give thanks to those individuals who are risking their lives to do their job right now. People, more than ever, need positivity and kindness.
It is likely there will be additional sources of relief if current circumstances continue. We will update and provide them to you as we deem necessary. As always, do not hesitate to reach out to me if you have any questions or comments. My email is [email protected], and you can also reach me at 770-344-0172.
Please see our General Disclosure.