Crisis Financial Planning

CRISIS FINANCIAL PLANNING | 7 THINGS YOU CAN DO RIGHT NOW

1. Prioritize bills – Whether your job has been affected or not, look at all your bills and identify which ones are critical and those that you may not need to pay immediately. Do check in with service providers as some may be offering assistance or an option to temporarily skip payments. For example, the Massachusetts Department of Public Utilities told utility companies Friday that it is extending the state’s moratorium on electric and gas service shutoffs for the duration of the state of emergency Gov. Baker declared this week to address the spread of the coronavirus.
2. Reduce spending– You should start reducing nonessential and discretionary spending in the event things get worse. These expenses can include entertainment, certain food items, and luxuries. Those savings should be stuffed away in a savings account as an emergency fund in the event you lose income in the next few weeks or months.
3. Reach out to loan companies & credit cards – If you’re already losing income and having difficulty paying your debts, reach out to your credit card, mortgage, or auto loan providers immediately. Generally, providers offer hardship programs, and some will even provide a small period for nonpayment. Many have now issued statements regarding their willingness to work with debtors who are facing financial strain due to the coronavirus. Check out this live page on assistance banks are providing, for the most current information call your bank directly. For those who do not have a credit card, you may want to consider opening one up for additional flexibility. Please consult with a financial counselor to ensure this makes sense for your financial circumstance.
4. Change how you pay student loans – Federal student loans come with several already-existing options. There are two ways you can temporary suspend your payments: deferment and forbearance. With deferment, you may be able to avoid interest accrual, while with forbearance you won’t, which means your debt will grow. A best practice during forbearance is to pay down the interest portion so that the debt will not grow.

There is another option though. Federal student loan borrowers can consider transitioning over to an income-driven repayment plan, which will lower the payment to a certain percentage of their income. Suspending or adjust your payments can be done by reaching out to your student loan servicer.

Private student loan borrowers do not have access to the same programs provided by the Department of Education, but can still reach out to their servicers to determine if there are any hardship programs being offered.

1. Remove automatic debit payments– If you think you will experience a cash crunch, you should consider removing automatic debit payments for your bills and other utilities. This way you can provide yourself with more flexibility to prioritize expenditures.
2. Internet Service – WiFi network free for everyone - see www.xfinity.com/wififor a map of hotspots. No disconnects or late fees for customers. Contact them and let them know you are having trouble. Internet Essentials free to new customers: Low-income families who live in a Comcast service area can sign-up for Internet Essentials. New customers will get 60 days of free Internet Essentials service, which is normally available to all qualified low-income households for $9.95/month. For all new and existing Internet Essentials customers, the speed of the program’s Internet service was increased to 25 Mbps downstream and 3 Mbps upstream. That increase will go into effect for no additional fee and it will become the new base speed for the program going forward.
3. Lookout for price gouging and scams related to the Coronavirus. It is illegal for businesses to take unfair advantage of consumers by selling goods or services that are “vital to the health, safety, or welfare of consumers”. If you see any price gouging, you should file a complaint. Services that offer products that can “cure” the virus should be avoided. You can find more information here.

RESOURCES

1. Unemployment – Unemployment benefits are typically available for those who lose a job. This temporary income is designed to help workers who lose their job through no fault on their own. However, as part of the effort to reduce financial strain during the outbreak, the U.S. Labor Department has loosened the criteria. Individuals can now apply for these benefits if they quarantined, not working due to a risk of exposure or infection, or to care for a family member. As of 3/18/2020 Massachusetts has also waived the 7-day waiting period. To find out more information or to apply, check out this link.  

2. School Meals – Project Bread is working with the Department of Elementary and Secondary Education and many schools and community partners to help families get school meals while schools are closed. They have an interactive map and a Google Sheet you can use to find your local school meals provider. On the School Closure Meal Information Google sheet, find your community, the name and address of your local school meals provider, the kind of meals they provide, and their opening times. To use the MA Meal Sites During School Closures map, you may want to "close the legend" so you can see more of the map. In the lower left of the map use + and - signs for zooming in and out to see more or less of the map.
3. SNAP and food pantries – For those facing a financial strain, the Supplemental Nutrition Assistance Program (SNAP), could be extremely helpful. It provides a cash benefit for food to help supplement those expenses. More information can be found here. You can also consider checking our local food pantries, which you can find here.  

4. Transitional Aid to Families with Dependent Children (TAFDC) – TAFDC is for families with children under 18, including teen parents. If you’re pregnant, you can apply for TAFDC for yourself if your child is due in less than 4 months. For more information click here. To apply call your local DTA office.
5. Emergency Assistance to Elderly, Disabled and Children (EAEDC) – Is a cash benefit available if you are disabled, are caring for someone who is disabled, are 65 years or older. For more information click here. To apply call your local DTA office.

6. Aid for small businesses – If you are a small business you may find some relief through the SBA’s Coronavirus Disaster Relief Lending program. These are loans of up to $2 million with 30-year terms at a 3.75% interest rate. More information

1. MassHealth & Health Insurance –  Uninsured residents can apply and get into coverage through a 45-day window running until April 25. MassHealth recipients can now get up to a 90 day supply of most prescription medications, and you can get early refills as long as you have at least 1 refill left on your prescription. MassHealth is making it easier for medical providers to use telehealth so you do not have to leave your home to see a doctor. Call your doctor’s office to ask about setting up a telehealth appointment. If you need help signing up for coverage, call customer service at 1-877-623-6765.
2. Immigration – The Executive Office for Immigration announced on Twitter - all non-detained aliens' master calendar hearings scheduled 03/16/2020 - 04/10/2020 are postponed. As of March 18, U.S. Citizenship and Immigration Services has suspended routine in-person services until at least April 1 to help slow the spread of Coronavirus Disease 2019 (COVID-19). USCIS staff will continue to perform duties that do not involve contact with the public. However, USCIS will provide emergency services for limited situations. To schedule an emergency appointment contact the USCIS Contact Center.
3. Self-care – The ever-changing situation is causing a lot of uncertainty and stress. As financial counselors, we know that financial stress impacts not only individual’s and families’ long-term financial well-being, but also their physical and mental health. Resources available through the Department of Mental Health connect individuals to free, confidential mental health support. For more info on the Department of Mental Health, click here.

Remember, the most important responsibility we all have during the Covid-19 Crisis is to stop the spread of the virus. Maintain proper hygiene, wash your hands, and practice social distancing. Inshallah the Covid-19 Crisis comes to a quick end with minimal loss of life.