These are trying times. For essential workers, life has remained largely unchanged save for fear of contagion. Many of us are working from home, and many more of us are out of work. Other states suffer infections due to their nursing homes carelessness, the nursing homes may be held liable. Those who have contracted COVID-19 and their families are in quarantine. How can we make sense of this economically?
Here are three tips that will help you ride out the pandemic, financially.
TIP #1 - Curtail Discretionary Spending.
This is the first tip for a reason. Even if you are still working and you have not been exposed to the coronavirus, you don’t know if your good luck will continue or how the pandemic will affect the economy in the coming months and years. It is far better to conserve your resources now than to find the basics unaffordable later.If you concentrate on purchasing the essentials now and use the remainder of income to beef up your emergency fund, you will be better prepared for whatever lies ahead.
TIP #2 - Apply for Any and Every Type of Assistance that You May Be Eligible For.
State Unemployment Benefits
While unemployment law varies from state to state, in general these benefits are available to employees, not the self-employed or independent contractors. To qualify to receive state unemployment benefits, you will have had to work a minimum amount of hours for a minimum amount of weeks prior to applying. Those with little or no work history will not be eligible.Visit your state’s Department of Labor website or its equivalent. In most states you can apply online for unemployment benefits.
Federal Pandemic Unemployment Assistance
The federal CARES Act provided the following three types of assistance, among other things:- Extension of state unemployment benefits another 13 weeks
- Addition of a supplemental $600 for every person eligible for unemployment benefits;
- It provides unemployment benefits to gig workers, the self-employed, and independent contractors.
As of this writing, most states are still struggling with the administration of the federal program, however, it is better to apply and wait for your state to figure it out than to not apply. Everyone eligible will receive the full amount they are due, eventually.
Economic Impact Payment
Another new federal benefit is the Economic Impact Payment administered by the IRS. Individuals are to receive $1200, married couples $2400, and married couples with dependent children an additional $500 per child.Your Stimulus Payment should be deposited into the account you have linked to your federal tax return filing by the end of June 2020. If not directly deposited, recipients will receive a prepaid debit card. If you have not received your payment yet, you can track it using this app.
Workers’ Compensation
If you contracted COVID-19 on the job and are out of work, you may be eligible for workers’ compensation benefits in the form of income replacement and medical costs. Be sure to notify your employer right away if you believe you have COVID-19 and that you were exposed to the coronavirus at work. Contact an experienced workers’ compensation attorney to discuss your claim.If you qualify, you will receive benefits for the time you are out of work. If you suffer any lasting ill effects from COVID-19 that affect your quality of life or affect your ability to do your job, you could also receive temporary or permanent partial or total disability payments.
TIP#3 - Take Advantage of Student Loan and Mortgage Forbearance to Pad Your Emergency Fund.
The federal CARES Act provides that you can temporarily stop paying your monthly student loan and mortgage payments until September, 2020. This may well be extended depending upon how the pandemic develops.If you are employed, you may be tempted to continue to make payments on your student loans and mortgage because these payments will apply directly to your principal. However, think about it… student loans and mortgages are loans that have much lower interest rates than credit cards, car loans, or personal loans, and therefore they constitute the least expensive money you can borrow.
What if something happens? A health crisis, a car accident that totals your vehicle, or you get laid off and you need ready cash? Stop making these monthly payments and put the money you would have used to pay them in your emergency fund. This should give you sufficient padding to address most any emergency that crops up in the next few months.
Financial health is as crucial as physical health, and even if you haven’t contracted COVID-19 (yet!) or lost your job (yet!), the pandemic still has the power to affect you and your family and cause you a great deal of stress and suffering if you do not take action on these three tips. Follow them, and you will be able to not only survive this health crisis but thrive, come what may.
About the Author
Veronica Baxter is a blogger and legal assistant living and working in the great city of Philadelphia. She frequently works with Larry Pitt, Esq. a busy Philadelphia workers’ compensation lawyer.
