Protecting Your Finances During COVID-19

Protecting Your Finances

For many of us, the current state of the world is a very scary time financially… in addition to everything else. In our house, we run two small businesses and our income is now a tiny fraction of what it was before this crisis. We’re lucky that we have prioritized saving money throughout our marriage so we have a small safety net, but, frankly, that won’t last forever. We have bills and we need to keep food on the table and we have no idea how long this is going to last.

So yesterday, Anel and I spent a long time on the phone with our accountant. We talked about how to handle applying for an SBA loan for Countdown and went through our personal finances with a fine-tooth comb. We’ve been working with Brittany for years and I truly cannot imagine life without her at this point. She keeps us in check, helps us with budgets, and organizes all of the finances for both of our businesses.

After our call, I asked her if she would write up all of her tips for protecting your personal finances because I think this information is so helpful for everyone right now, especially with the first of the month coming up in two days.

Not only is she incredibly knowledgable about personal finances, but she’s also one of the most optimistic people I’ve ever met. She is the only accountant I’ve ever known who talks about karma and your 401k at the same meeting! We talk about acupuncture and crystals before we get to payroll taxes. I always feel uplifted after our monthly calls.

If you’re a small business owner, you can read everything she’s written about finances for small businesses and freelancers during this crisis here.

Take it away, Brittany…

Almost everyone is under financial strain right now, and most banks, lenders, and utility companies are generally willing to work with people. If you are struggling financially, or if you do not have 3-6 months in savings, take the steps you can to keep cash on hand and build up a safety net. My advice is to not go overboard with deferring everything to a future date because the day will come when it has to be paid.

Try to resist the human desire to act from a place of scarcity and greed. We are allowed to feel these things right now, but we don’t have to operate from that mindset. For many of us, our basic needs are not being met right now, but we can move beyond that, take control, and put good energy into the universe when and where we can. We can affirm that we will be okay financially and that we can pay our bills in some capacity.

Take a moment to check-in with yourself and your bank accounts. Make a list of items you know you definitely can’t afford to pay at the moment and what money would be better saved right now.

Once you have your list, check with companies you might not be able to pay and see what their policy is for reporting to credit bureaus, they have to tell you. Most companies will report 30 days after the payment due date. If this is the case, if you’re just shy of being a month past due, you will still be in good standing with your credit and still have your services in place while beginning to conserve cash. These bills won’t magically disappear, you’ll just be pushing them forward to the future, but in times of crisis, it’s helpful to know what your options are.

Mortgage

– If your mortgage is backed by Fannie Mae, Freddie Mac or the Federal Housing Administration (FHA) they will work with you to either suspend or reduce your mortgage payments during this time. If your mortgage is not backed by a federal agency, it’s still worth reaching out to them sooner rather than later and letting them know your situation to see what sort of programs they have in place.

– Please keep in mind that the mortgage payments won’t disappear – they will either be tacked on to the end of the mortgage, or you will owe them once you get on your feet. Please pay attention to the terms they give you to ensure you aren’t going to owe 3 months of payments 4 months from now.

Rent

– If you can’t afford to pay rent right now, reach out to your landlord as soon as possible and see if you can work something out with them. Most landlords will be willing to do what they can to help you. If they are unwilling, know that you likely have protections in place where you cannot be evicted during this crisis. Please check with your state’s government to see if policies have been put in place to protect tenants.

– Before making an agreement, or withholding rent, understand the terms – will the missed or reduced payments be spread out over the remainder of your lease, or will they all be due at once?

Utilities

– Being able to negotiate with your cell phone and cable/internet provider have always been a thing – so don’t feel shy about giving them a call now and asking what they can do for you. They may be able to give you a temporary discount or move you to a lower plan.

– If you have other options available (ie, switching from Verizon to Sprint, or one cable company to another) you can also use this as leverage. If they still won’t budge, you can totally also actually look into switching to save some money in the short-term.
If for some reason you cannot afford to pay your utilities, you might have protections in place by your state’s government that prevent your utility companies from shutting them off. Please check with your state.

Credit Cards

– Same with the utilities – being able to negotiate on the rates your credit cards charge you has always been a thing. Take advantage of it now. Give them a call, bonus points if you have a good payment history with them, and ask if they can give you a reduction in your interest rate. You might be surprised!

– If you are worried about being unable to pay, definitely call as soon as possible and see what they can do for you – they might be able to give you a payment extension without it negatively impacting your credit, or pause interest charges all together.
If you have a high balance of credit card debt on a traditional card and good credit, look into opening a new card with 0% interest and do a balance transfer so at least your minimum payments will be lower for the next few months.

Taxes

– If you have already filed your 2019 taxes but haven’t paid yet, you can defer your payments until July 15, 2020. It’s easy to cancel any previously scheduled payments by following the instructions here.

– If you normally pay in estimated taxes quarterly, Q1’s payment is also deferred until July 15, 2020.

– If you already have a tax savings account, and your tax money is set aside, I think it’s okay and acceptable to let that money sit in your savings account until July. If you end up needing it in a pinch, you can use it and file for an installment agreement with the IRS. If you end up not needing it for an emergency, you’ll still likely rest easier knowing that you have something to fall back on if you need to.

Student Loan Payments

– If your student loans are federally backed, they’ve already stopped charging interest and if you can’t make payments, give them a call and they will work with you.

– If your student loans are not federally backed, it’s still worth giving them a call and knowing what your options are.

Even if you don’t feel like you are in a bad financial situation now, but are still finding yourself worrying about the future, taking these steps – calling your mortgage company, landlord, etc. and just finding out what your options are if and when things to start to get tight for you, will likely help ease your mind. I know for me, anxiety and fear always manifest in the unknown. Once I take that step and get the info and bring the fears into the light, I feel so much better. Even if nothing changes in my day-to-day, I still feel better which makes all the difference. Our lives are mostly lived in our minds, not in the physical realm, so taking care of self first and taking actionable steps will literally change our reality.

More things to do to take control and feel good:

Donate Money and Time

– Even if you are finding yourself with nothing right now, I strongly believe it’s still very necessary to donate something – money or your time. Affirm to the universe that you have so much faith in its’ ability to provide for you that you are giving away the limited resource that you have, even if it feels very scary.

– Another plus of donating money in 2020 is that everyone will be able to deduct $300 on their tax return, even if they don’t normally itemize deductions.

Educate & Empower

– Make a budget! It doesn’t have to involve Excel and it doesn’t have to be anything fancy. Just take a piece of paper, sit down, and sketch out what your baseline expenses look like. How much do you need on a monthly basis to keep a roof over your head, keep the lights on, and keep food in your belly? Do you have a few months’ worth of that saved up? If not, it’s okay, most people don’t. But, where can you trim expenses elsewhere to start building up that safety net? I’m sure most of us will find it easy to save money right now since we’re not going out as much (at all).

– Read-up on what resources are out there from our federal government and your state/local government. There might be much more than you are aware of.

Don’t Hoard & Stay Positive

– I know that it probably feels counterintuitive to every fiber in your being during financial insecurity to not constrict and move into a me vs. you mindset, or a lack and limitation mindset, or a poverty mindset, but money is still an energy and constricting/hoarding doesn’t do anyone any good.

– When mapping out the bills you feel comfortable paying vs. the ones you don’t feel comfortable paying, ask yourself why? Try to get in touch with the energy behind it. If we all stop spending and constrict, we’re all going to go under. A rising tide lifts all boats. We are the only ones that can help ourselves get out of this, and we do that by helping each other. Think about who your payment is going to – is it a small business? Try to pay it. Is it going to the IRS? Eh, maybe hang onto that until July lol – they’ll be fine.

– If you’re finding yourself being fearful of the larger bills and feel okay paying the smaller bills, try to negotiate on the bigger ones if you can.

If things are really tough and you’re in a financial crisis, look into state resources such as SNAP (food stamps) and Medicaid. We have so many resources in this country and there’s absolutely no shame at all in needing help to make ends meet.

Questions for Brittany? Write them below and she’ll answer them for you!

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  1. Amber Jones said:

    For those of us that have money to invest right now. What are safe investments? What conservative investments do you recommend? All of our 401k’s have taken a huge nosedive. So what do you recommend. Thanks!

    3.30.20 · Reply
    • Brittany Turner said:

      Hi Amber! Thank you for your question.

      I can’t give specific investment advice. What I can say is that continuing to invest regularly as you normally would is advised. Whatever investments you would normally buy into are fine. I continue to invest on my normal schedule, regardless of how the market is performing. If you have a 401k or IRA in place, don’t stop your recurring contributions, if you can. Also, for me, not checking my 401k and IRA all of the time, especially right now, is helpful. I just let my automatic investments do their thing.

      If you are closer to retirement, this strategy may not work as the amount of time you have for the market to recover would be less.

      Hope this helps!

      3.30.20 · Reply
  2. Jen said:

    I am even more interested in her SBA loan advice. We have been working through the legislation but would love her insight.

    3.30.20 · Reply
    • Brittany Turner said:

      Hi Jen!

      Thanks for the feedback. I do not have any specific posts right now related to the SBA loans, aside from the new Paycheck Protection Program (PPP) and the $10,000 grant offered on Economic Injury Disaster Loans (EIDL). I hope to have some more information up later this week specifically on the various SBA loans and how to apply.

      Hope this helps!

      3.30.20 · Reply
      • Jen said:

        Thanks. Everything so far is very general information. I am sure they are working on it all. We are waiting to hear back from our accountant also. Be safe!

        3.30.20 · Reply
        • Julia said:

          Good luck, Jen!

          4.9.20 · Reply
  3. Caitlin said:

    In addition to the SBA loan, I encourage you to research the new unemployment check criteria as part of the CARES act. You and Anel would absolutely qualify and can receive $600+ per week per adult who is affected. The government has set aside unprecedented amount of money for this exact situation and it is designed to help take away some of the current/future financial stress from people like you who own small businesses that cannot operate and have lost daycare access.

    3.30.20 · Reply
    • Julia said:

      We looked into this, thank you so much for the tip!

      4.9.20 · Reply
  4. Quincy said:

    I really appreciate you taking the time to share your own financial fears (my family is feeling them too) and also provide some tangibly practical advice about how to combat them. This kind of content is why I love following you, and will do my best to support your work however I can!

    3.31.20 · Reply
    • Julia said:

      Thank you so much for saying that, Quincy! Means a lot…

      4.9.20 · Reply