How Will Coronavirus Affect Your Finances?

By Jacinta Sherris

The COVID-19 pandemic has affected nearly every aspect of American life, from the way we work to the way we socialize. Finances have especially been shaken up.

News of the economy beginning to recover along with the recently introduced, start-of-the-art vaccine are uplifting developments. However, many Americans are still suffering from the economic consequences the pandemic has caused. 

Even though it may be some time before things get completely back to normal, there are things you can do now to take control of your finances. Resources exist. While they may not fix everything, they can help.

Apply for the Benefits You Need as Soon as Possible

The federal government is continuing to provide benefits for people affected financially by the COVID-19 pandemic. As of December 27, a second stimulus bill was signed into law that will extend unemployment insurance for another 11 weeks. 

The latest, $900 billion bill covers workers impacted by the COVID-19 pandemic, as well as self-employed individuals and contractors. Another round of stimulus checks is also being distributed at the time of writing. 

Here are some ways you can take advantage of these benefits:

Step 1: Collect Your Documents

You will need to have all your personal information and finance documents in order before you can apply for any type of aid. The specific things you will need will vary according to which benefit program you are applying to, but most likely you will need your most recent tax documents, social security number, employer information, income history, and identification.

Step 2: Receive Your Second Stimulus Paycheck If You Qualify

Much like the first round of stimulus payments, you’ll qualify for the second round of payments if you are a U.S. citizen or permanent resident, are not claimed as a dependent on someone else’s tax return, have a Social Security Number (SSN), and if your income was up to $75,000 in 2019 –  or $150,000 for couples who filed jointly.

If you are a recipient of Social Security, disability, or any other government benefits, including survivor or veteran, you’ll also qualify for another stimulus check. 

Each qualifying individual can expect to receive $600 and another $600 for each dependent child. 

You can expect to receive your second stimulus check the same way you received your first payment. It will be mailed to the address you’ve provided on your most recent tax form or deposited directly into your bank account. 

If you never received your first stimulus payment because you either didn’t qualify or didn’t file your taxes – you likely won’t receive the second round of stimulus payments. 

The deadline for registering online for an Economic Impact Payment has already passed. Although you may be able to receive your funds in 2021 via a Recovery Rebate Credit on your 2020 tax forms. 

Step 4: Apply for government benefits

If you’ve been laid off or furloughed, you can qualify for unemployment benefits as well as a host of other government benefits and loans. Self-employed workers or contractors who have seen their income drop as a result of COVID-19 are also eligible for many benefits. 

Make sure to contact your state’s unemployment insurance office to learn more about how to qualify, the types of benefits offered, and how to apply. 

Salary and Benefits 

The federal and state governments have numerous benefits available to people who have been laid off or furloughed as a result of the pandemic. While a stimulus check and unemployment benefits might help with immediate needs, you’ll want to make sure to check up on other resources you qualify for. 

It’s also a good idea to check in with your employer to see if they are offering any benefits to employees that have recently been let go.

Paying Bills and Debt

If you’re facing financial hardship as a result of the pandemic, keeping up on bills and paying off debt may seem daunting. But there are some things you can do to ease the burden. The first thing you’ll want to do is organize your expenses. 

Make a list of your bills by order of their priority – rent, mortgage payments, car payments, food and utilities should come first. Try eliminating anything that is not a priority. If you need help, consider making a budget

If you need additional help paying off your bills, you could contact your landlord or mortgage/utility provider to negotiate leniency at this time. It’s possible your state is still continuing mortgage relief programs. Read our articles on mortgage relief and student loan relief.

You can also try to negotiate with your creditors about a lower rate or pushing back payments. Many people have been able to defer payments for months at a time because of the ongoing situation. 

Just remember that you will need to pay back the money you owe eventually. You should only make these arrangements if it is absolutely necessary.

Your Savings

Thoroughly investigating and applying to all the benefits you qualify for will help you avoid dipping into your savings. You should only tap into your savings as a last resort. If you have had to take money from your savings to hold you over a few weeks, make sure to use your stimulus check to replenish the account when the funds become available. 

Investments

Markets have seemingly recovered from their low point in March and you may feel tempted to sell your investments to reap a profit. However, it’s important to consider whether doing so fits in with your overall investment strategy. 

Are you in it for the long-haul or are you just trying to time the market? Remember that if you sell your investments you’ll need to pay taxes on your gains, so it might make more sense to hold out for the long term. 

If your investment account is still at a loss, remember that the worst thing you can do is sell your investments at a low valuation, because they should eventually rebound. Hold onto your investments and continue to add money into your investment accounts if you are able to.

Times Are Uncertain, But Resources Are Available 

The government has recently extended resources for those facing financial hardship during these uncertain times. It’s important to stay informed about the benefits you’re eligible for and remain calm in the meantime. 

Throughout the pandemic, there’s been an increase in scammers and predatory lenders popping up to prey on people nervous or desperate about their finances. Make sure to avoid them at all costs and alert your family members and community to beware. 

If you need additional cash assistance, make sure to check out some low-cost lending options from MoneyLion.

MoneyLion offers 0% APR cash advances up to $250 as well as low-APR Credit Builder Loans up to $1000 for members. There is no hard credit check to qualify for any of these safe lending alternatives and funds are available instantly. 

Learn more about how MoneyLion can offer financial solutions – whatever your current situation.

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