2020 has been a year. Much like Lord Voldemort, people will shudder when referring to it. But that's not to say nothing can be done to mitigate the 2020-ness of recent events. Our first piece of advice is to not panic. You're not alone. Everyone is going through this - like literally the entire planet, and we're going to get through this together.
New Stimulus Package
Speaking of getting through it together, despite a bit of back and forth, our government has worked across partisan lines, and quickly, for the first time in... well, a long time, to pass a $2 trillion stimulus package that will benefit all Americans.
Taxpayers who have filed taxes in 2018 and/or 2019 with an income up to $75,000 each ($150,000 for couples filing jointly), or $112,500 for single parents will receive a one-time direct payment of $1,200; with that payment decreasing for incomes above the cap. You'll also get $500 per child. If you haven't filed taxes for 2018 or 2019 yet, you should do that ASAP to take advantage of the stimulus package.
If you have direct deposit set up for your taxes, you should see your stimulus payment come through in the next few weeks. It will take a little longer if the IRS needs to cut and mail you a check.
Student Loans
Federal student loan interest and payments have been suspended until September 30th 2020. This also means that wage garnishment and seizure of tax refunds is suspended. If you're currently in default on your student loans, these 6 months of payment and interest suspension count towards the nine months needed for loan rehabilitation. This is HUGE!
If you have a federal loan you don't need to do anything to activate the suspension, and you should receive some kind of notice within the coming weeks. This suspension also counts towards loan forgiveness programs, including Public Service Loan Forgiveness (PSLF) and Income Driven Repayment Forgiveness (PAYE, REPAYE and IBR).
Taking advantage of student loan suspension is a great way to add some liquidity to your current situation, by directing as much as you can, of what you usually budget towards your monthly student loan payment, into an emergency fund. If you're fortunate enough to still be earning your full salary and have an emergency fund, you can continue paying down your student loans, and benefit from the next 6 months being interest free.
Remember, private student loans and some Federal Family Education Loans that are not held by the Department of Education may not qualify for the suspension. If you have non-federal student loans, reach out to your lender and see what they can do.
Taxes
By now, you've likely heard that the federal government has pushed taxes back to July 15th. So what does that mean for you? Well, it depends on your situation.
If you are expecting a refund and are ready to go, then you should file! The IRS is open for business and the sooner you file, the sooner you will receive your refund. Another pro tip is to make sure you e-file your tax returns and set up a direct deposit to speed up your refund.
If you aren't expecting a refund and could do with a little extra cash flow in the immediate short term, then take advantage of the extended deadline.
If you have to file with your state, don't forget to check your state tax filing date. Many states are pushing their filing dates back in order to help out taxpayers during these challenging times.
Housing
If the current situation has you struggling to pay for your housing, you have options:
Reach out to your lender for your home mortgage, and see what they can do - keep in mind, your mortgage owner may not be the original lender you signed with. This isn't anything to be alarmed by - large institutions purchase debt as an investment all the time. Look up who owns your mortgage at the links below:
The federal government is encouraging banks to pause interest and payments, as well as evictions.
If you rent, reach out to your landlord and see what they are willing to do. Chances are they'll be prepared to work with you, and you're probably not the first to ask. Heck, even
The Cheesecake Factory is asking for help with their rent!
Phones
It's important to stay connected - your phone can be a lifeline at times like these. Check with your carrier, most of the big players have agreed not to shut off phone lines for individuals or small businesses due to late payment during this time. Some carriers are even temporarily waiving late fees.
This can save more money than you'd think. Not only is having your phone disconnected an inconvenience, but to have it reconnected usually involves some once-off charges - all of which you can currently avoid.
Monthly Subscriptions
That photo editing app or silly game you downloaded 3 years ago could still be charging you a monthly fee that you're unaware of. Go through your credit card and bank statements looking for recurring fees - those suckers begin to add up! Don't forget to check your PayPal, Amazon and cloud accounts for other hidden subscription fees.
WalletFi is a handy tool to help find all those hidden subscriptions and unenroll you.
Social distancing might not be the best time to cut back on your various streaming services, but that gym you can't go to, yeah, you can probably cancel that membership for the time being. We've found a neat life hack, where lots of online workout studios are offering classes for free or on a pay-as-you-can basis. Allowing you to reap those health benefits without putting unnecessary strain on your wallet.
Unemployment
If you think unemployment benefits don't apply to you, think again! The federal government has amended the unemployment requirements to cover those who have lost income as a result of the Coronavirus crisis. This benefit is open to full time, as well as part-time and freelance/gig workers. It also covers loss of income of 50% or more. Check out your state's unemployment program
here.
Our government has set up these various assistance programs and unemployment benefits to help sustain the workforce throughout this unprecedented crisis that has hit the income of Americans through no fault of their own. The government wants us to participate in these programs to keep ourselves in good financial shape, this is because it's a lot easier to give a slow economy a boost than it is to revive one that has come to a halt.
That way, we'll all be ready to get back to business as usual when the economy opens back up.
Happy Saving!
Wesley Belden
Scholar Raise Founder
