All across the country, workers, head of households, single Moms and Dads, families, have lost their primary and secondary sources of income.
It is numbing. The government has not finished working out the details of beneficial financial relief and we have no idea how long this is going to last.
What do we do?
If your office has closed, the federal government has made it easier to file for unemployment during the CoronaVirus pandemic. If your employer had to temporarily shut down, you can file. Some states are requiring the business owner to file on your behalf. Check your state’s regulations to see to what extent they have made it easier.
In Texas, if you have been laid off or lost your job through no fault of your own, you can file for unemployment. The Texas Workforce Commission (TWC) job search requirements are waived, as is the week waiting period, which is helpful if you will have employment after the company is back in business.
What the state of Texas has not implemented yet is if the employee no longer wants to work in that business because they feel their health is in jeopardy. Some healthcare and dental employees are feeling the emotional strain of having their own health and their family’s health put in jeopardy. The recourse for them is to file unemployment and appeal when it is declined.
Whatever state you live in, if you have already lost your job, file ONLINE sooner than later. Many more are expected to lose their jobs as summer approaches. Payments can last up to 26 weeks, but some analysts expect this to also be extended. States vary on how much of your paycheck is covered. The Texas weekly benefit amount can be between $69 and $521 depending on your past wages.
The two questions that have not changed: did you lose your job through any fault of your own AND are you able and available to work? Most of us WANT to work. Some states are providing unemployment benefits if you have had your hours drastically reduced because of this crisis. If you are unsure if you are eligible, file anyway.
You can also apply for Disaster Unemployment Assistance through the TWC website. According to the DUA’s website, “You must have been determined not otherwise eligible for regular unemployment insurance benefits (under any state or Federal law).” In other words, no double dipping.
If you are an employer or small business owner, thus far, the Funding Package has yet to be voted on. Since small business is the backbone of our economy, I am hoping the stimulus package is fair and helpful. It is hard on you to have employees file unemployment. If you are able, pay them two weeks sick pay (NOT an advance), then pay the FMLA that was just passed in the bill. This will come back as a tax credit. Check with your CPA.
How do you manage your finances during this hugely uncertain time?
- Be mindful of everything you spend. This should really be something we do on a daily basis. We should save money on the whole during this time because only having take-out, curbside or delivery has decreased our options.
- Pay ALL your bills on time. This is not a time to tank your credit rating. If your available cash is low, pay the minimums due but pay them on time. Years ago, I put all recurring charges on my credit cards, such as utilities. My mortgage & homeowner’s insurance is automatically deducted from the bank, as are my car & auto insurance.
- Communicate with your lenders. We are all in this together trying to figure it out. If you have a good pay history, often you can request postponement of payment or interest only payment. But contact them if you need help in those payments. If you are renting, this includes your landlord.
- Temporarily stop feeding your retirement. This will increase your cash flow. Since we do not know how long this will last, an increase in cash flow will be a good thing. You can continue when you have a full time paycheck again.
- If you are getting a refund, file your taxes now. If you are not getting a refund and you owe, file for an extension. If you owe, you are allowed 90 additional days to pay BUT you must file for an extension. This is a good idea anyway because you can decide how much, if any, to contribute towards your retirement accounts in October, not now. [UPDATE: The IRS has pushed back the 1040 Tax Filing deadline to July 15th.]
- Refinance your mortgage or get personal loan or line of credit. If you have good credit, the interest rates are abdominally low at this time. A personal loan would be good to pay down any credit card debt, which will increase viable cash flow. BUT, then go back to #1. No extravagant spending. We are in lock down mode and if you do not have six months savings stashed away, now is not the time to use the credit card for things you truly do not need but just want. Bankrate.com has current rates of loans. Check to see if you can save $$$ on your mortgage payment.
- COVID-19 expenses. If you are using personal finance software, create a separate expense account called COVID-19. Right now, we are uncertain as to what kind of financial relief will be available. Tracking the expenses directly connected with having to work at home, etc. may be reimbursable down the road. If you are not using a personal finance software, use a spreadsheet to keep track of these expenses.
- Feeling trapped with everything and no way out? Clean the garage, closets, anything that will give you a sense of accomplishment. Check on your neighbors, take a short drive away from the house. Be sure to not binge on comfort food – that will not help you fight off the virus should you become exposed. Take care of yourself. This will too shall pass.
I remember when the stock markets re-opened after 9-11 and then plummeted. I stood in the middle of my parent’s living room, with tears streaming down my face. My 87 year old father said, “Honey, I’ve lived long enough to know that when a door slams shut,” (then he turns to me with a whimsical look in his eyes and laughs), “look for a window. There’s always a window somewhere.” Then seriously, he said, “I’ve lived through a great depression, four major wars, many financial crises, and it always works out. Somehow, someway.”
He is right. NO matter how hard this is. No matter how weird it is. It will, at some point, end.
Hang in there, everyone. And don’t forget to breath.