- Nearly half of U.S. adults have reported that their mental health has been negatively impacted due to worry and stress over the virus, according to a Kaiser Family Foundation poll.
- A new NFCC survey finds situations that immensely exacerbate financial worries include not having enough savings, losing a job and the inability to pay debts.
- Many large health insurance companies as well as Medicare have increased their capacity and coverage for telehealth visits with mental health providers.
Here are some tips from the mental health and financial experts on how best to cope with these common money stressors.
1. Not enough savings
If you find yourself struggling financially and have a limited emergency fund — or none at all — focus instead on what you can control. “First, carefully examine your expenses and reprioritize your spending. Cut out everything but the essentials , such as, mortgage or rent, food, utilities and insurance,” said author and certified financial planner Carrie Schwab-Pomerantz, who is also president of the Charles Schwab Foundation. “If you’re unable to pay a bill, contact your creditors right away. They may be willing to negotiate a payment schedule or waive late fees.
2. Job loss
If you haven’t already, file for unemployment benefits immediately through your state’s program. There will likely be a lag time until you receive your first check.
- Make sure you still have health insurance. You could switch to COBRA to receive the same coverage you had under your employer for the next 18 months, but you have to pay for it yourself at a considerably higher cost than you were paying as an employee. “Do some comparison-shopping.”
- Consider other jobs that you may be able to pursue. Use your down time to learn a new skill or start that side-hustle. Education, health care, and technology companies are among some of the industries hiring remote workers right now.
3. Inability to pay your debts
Nearly half of U.S. adults currently have credit card debt and 13% of them are not paying anything at all or don’t have a plan on how to pay, according to a report by CreditCards.com.
Consider temporarily paying only the minimum on mortgage/rent, car loans and student loans as well, said Schwab-Pomerantz, whose Schwab MoneyWise website has a list of resources to help during the Covid-19 crisis. More help could be available. You may be able to lower or suspend your mortgage payments for up to one year in some cases. Contact your lender. If you’re having trouble paying your rent, talk to your landlord about your situation and your options. Some states and municipalities are providing eviction restrictions for impacted individuals. Many utilities and phone companies have stopped cutting off services for nonpayment. Call them.
For more information, click here.
- Ask students how the corona virus has affected them, their relatives, or friends. What steps have they taken to minimize the effects of the corona virus?
- List the steps to take if you don’t have enough emergency funds to get through this financial difficult period.
- How are millions of Americans coping with stress and anxiety as they deal with the fear and reality of death and disease due to the corona virus pandemic?
- Discuss the economic and emotional worries that are keeping American awake at night.
While insurance may be the last thing on your mind during the holidays, the start of a new year is the perfect time to review your insurance coverage and update your home inventory list. When you reflect on the last 12 months, especially with the pandemic, you might realize that some of those changes could greatly affect your home insurance needs. So, try starting a new tradition: update your home inventory list. Here are four good reasons to add an annual insurance review and home inventory update to your list of holiday traditions.
- Your new gifts may not be covered.
Your homeowners insurance will cover most of your big-ticket gifts like a big screen TV, new electronics and expensive jewelry, but only up to your policy limits. That’s why it’s important to maintain a current record of all your belongings. Update your home inventory this holiday season so your coverage limits meet your insurance needs.
- A lot can change in a year.
Think about the new “normal” we’re living in with COVID-19. With many people spending more time in their homes, it is not surprising that home improvement projects have increased in popularity. According to a recent porch.com survey, 76% of homeowners have completed at least one home improvement project since the start of the pandemic. Take photos or a video of your remodeled kitchen or bathroom, gather receipts and add them to your inventory list. When you review coverage at the start of the year, you can ensure your new assets are safeguarded.
- It will make filing an insurance claim easier.
The information you put into the home inventory list can make an insurance claim settlement faster and easier. This is especially crucial for high-value items. Don’t forget to document your attic, basement, closets and other storage areas. Can you imagine trying to compile all this information after a disaster? Without a record of your belongings, remembering everything you own or what you’ve lost can be challenging.
- It’s free and easy.
With today’s technology, it’s never been easier to keep a detailed catalog of your possessions. Keep your home inventory list in a safe place outside your home or cloud-based storage services like Dropbox or Google Drive. Also, your insurance agent will be happy to review your insurance coverage with you at no cost.
Creating a home inventory doesn’t have to be complicated. It can be as simple as standing in the middle of each room and taking a 360-degree video. Tackle this project with your children and show them family keepsakes and their history.
For more insurance information, click here.
- Ask students if they rent or own home. Do they have renters or homeowner’s insurance? Have they prepared a list of their personal belongings? If not, why?
- If students don’t have a household inventory, encourage them to prepare a list of their belongings.
- Why is it important to annually review your home insurance needs?
- Where should you keep your home inventory list?
While no one plans to lose their wallet, you can reduce the trauma of that event. Consumer protection experts recommend not
keeping these items in your wallet:
- your Social Security card; also make sure nothing else in your wallet contains your Social Security number.
- a list of passwords; keep the list secured at home, and consider use of a password manager.
- spare keys; a lost wallet with keys and your home address on an ID card is an invitation to burglars.
- blank checks; while few people write checks, blank checks are risky as a thief has your account number and the bank routing numbers and probably your home address.
- your passport or passport card; an identity thief could travel under your name, obtain a copy of your Social Security card, or open a bank account. Whenever traveling on a passport, keep a copy in a safe place.
- extra credit cards; carry only one or two cards to avoid having to cancel many cards if your wallet is lost or stolen.
- other items to keep out of your wallet: birth certificate; receipts that could be used to by skilled identity thieves; an old Medicare card with your Social Security number; and gift cards, which could be used by anyone with access to your wallet.
By following these guidelines, you can avoid identity theft, bogus loan applications in your name, and someone opening fraudulent accounts. Also recommended: photocopy the front and back of the items in your wallet to have a record of what is lost or stolen.
For additional information on what not to keep in your wallet, click here:
- Have students talk to others to determine if they carry any of these items in their wallet.
- Have students create a checklist of action to take if your wallet is lost or stolen.
- What are actions people can take to avoid identity theft?
- Describe how technology and apps are replacing traditional wallets. Discuss how these devices might improve security against identity theft.
Each year, the IRS warns taxpayers about the “Dirty Dozen” tax scams. Some of these cons show up on the list each year, while others are new. Tax scams are most common during tax season or times of crisis. The COVID pandemic created opportunities to try steal money and information from taxpayers.
Taxpayers are reminded to beware of these ongoing swindles that include:
- Phishing involves fake emails or websites to obtain personal information. The IRS never initiates contact by email. Do not click on links claiming to be from the IRS. Also be wary of keywords, such as “coronavirus,” “COVID-19,” and “Stimulus.”
- Fake charities are a reoccurring concern. Criminals often take advantage of natural disasters and other situations, such as the COVID-19 pandemic, to set up a phony charity, and may even claim to be working with the IRS to help victims.
- Threatening impersonator phone calls claim to be collecting money for the IRS. The scammer uses fear and urgency to demand immediate payment. Senior citizens and their caregivers should be especially alert for this type of fraud.
- Unscrupulous return preparers, called “ghost” preparers, expose their clients to serious filing mistakes and tax fraud. Ghost preparers do not sign the tax returns they prepare, as required by law. While most tax professionals provide honest service, others should be avoided.
- Fake payments with repayment demands involve scammers tricking taxpayers into sending them their refund. The criminal steals or obtains personal data to file a bogus tax return. Once the money is in the bank account, the criminal poses as an IRS employee to request that the money be returned immediately, perhaps in the form of gift cards.
Some recent tax scams that have surfaced include
- Offer-in-compromise mills involves misleading tax debt resolution companies exaggerating their ability to settle tax debts for “pennies on the dollar.” The offer requires that taxpayers meet certain legal requirements. Dishonest businesses enroll unqualified candidates to collect hefty fees from taxpayers already deep in debt.
- Economic impact payment or refund theft, in which criminals filed false tax returns or bogus information with the IRS to redirect refunds to a wrong address or bank account.
- Social media scams may use COVID-19 to trick people. The scammer uses information on social media to send emails pretending to be a family member, friend, or co-worker, which can result in tax-related identity theft.
- Ransomware takes advantage of human and technical weaknesses to infect a computer, network, or server. Invasive software (malware) can track keystrokes and other computer activity. An infected computer can allow access to personal and financial data. Or, a ransom request appears in a pop-up window.
To avoid these scams: (1) be aware of potential cons; (2) check with the IRS or your bank if something is suspicious; (3) keep your computer system and passwords secure, and (4) avoid deals that are “too good to be true.”
For additional information on tax scams, click here.
- Have students describe these situations to other people, and ask them what actions they might take to avoid these scams.
- Have students create a video or visual presentation to warn others of these potential scams.
- Why do some people get taken by tax scams and other frauds?
- Describe actions that might be taken to avoid various tax scams.
COVID-19 has thrown the economy into a tailspin. Many people have been laid off, furloughed, or are working fewer hours. And as wages dry up, bills can pile up.
Debt can be tricky. Here are some ideas about how you can manage your debts and start regaining your financial well being.
- Gather your bills: Make a list of your monthly bills: rent/mortgage, car payment, utilities, student loans, medical bills, and anything else. Consider how much you need for food, medicine, and other necessities.
- Ask for help: Many companies have special programs to help people right now. Contact the companies you owe money to and try to work out a new payment plan with lower payments or delayed due dates. Make sure to get any changes in writing.
- Find out if your state or local government offers programs that will allow you to hold off on paying some bills right now.
- Trouble paying your mortgage? Here’s some advice on how to manage that problem. If you have a government-backed mortgage, you may be able to delay payment by contacting your servicer.
- Need additional help? Check out ftc.gov/creditcounselor for tips on how to choose a counselor who really helps you out.
- Prioritize if you need to: If you still can’t pay everything on time, look at what would happen if you couldn’t pay each bill and decide which bills to pay first. Would you lose your home? Would your car be repossessed? Would your debt go into collection and affect your credit report?
- Study up: Check out the FTC’s advice on how to cope with debt in the short term, and how to get out of debt when you are able.
- Watch out for scams: In stressful times, scammers are everywhere. Beware of any company that guarantees that creditors will forgive your debts, or makes you pay up front for help. If you are looking for debt relief, make sure to find help you can trust.
For more information, go to: click here.
- Ask students to develop a plan to manage their debts, especially during the coronavirus pandemic.
- Ask students if they should turn to a company that claims to offer assistance in solving debt problems? Why or why not?
- Why should you avoid waiting until your account is turned over to a debt collector?
- What is a constant worry for a debtor who is behind in payments of bills?
Categories: Chapter 5, Debt
For many people, how to pay for a college education is one of the major financial decisions before deciding on a school. There are many different ways to pay for college. Understanding your choices can help you make the right decision for your situation.
Start by completing the Free Application for Federal Student Aid (FAFSA)
A critical first step for many prospective students is to complete the FAFSA . FAFSA completion is an important part of the student aid process.
Due to the coronavirus pandemic, some states have extended their FAFSA deadlines. . Contact your school’s financial aid office to find out if their priority FAFSA deadline has been extended.
Why fill out the FAFSA?
Filling out the FAFSA is required if you want to apply for federal assistance, including grants, loans and work study. Your eligibility for need-based federal aid, such as Pell Grants and subsidized student loans is determined by your FAFSA submission.
Filling out the FAFSA does not commit you to taking out student loans or accepting the financial aid offered. However, if you do not submit a FAFSA you will not be able to access federal grants or other forms of federal financial aid.
In addition, states typically require students to complete the FAFSA to qualify for state grant programs, and most colleges and universities will not consider awarding any institutional aid, until the FAFSA has been submitted.
Even if you have not finalized your plans for this fall, consider filling out the 2020-2021 FAFSA sooner rather than later, many state and schools award aid on a first-come, first-serve basis and may have established earlier, “priority” deadlines. If you miss a key deadline to complete the FAFSA, you will limit your ability to qualify for state or institutional funding.
For more information:
- Ask students why it is important to complete the FAFSA form sooner than later?
- What basic information is needed before beginning the FAFSA application process?
- Where can you get assistance if you need help in filling out the FAFSA form?
- Why is important to take advantage of any scholarships and grants before applying for a federal loan?
During difficult times, as well as in other times, saving money is difficult. While high-tech and app methods may work, traditional actions can result in quickly increasing your wealth. These weird-sounding saving habits suggested by millennials include:
- Save a certain denomination of money. People who get paid in cash or receive change suggest saving every five-dollar bill, for example, in an envelope. This money can be used for fun activities, a special dinner, or to add to your long-term savings.
- Use a jar to control spending. Put a set amount of cash in a decorated jar for lunches, eating out, or other budget item. Having to actually pull money out of the jar will make you more cautious of your spending habits.
- Skip buying certain items. Avoid coffee, soft drinks, snacks, or other impulse items, and save that amount. These small amounts can add up to larger sums saved.
- Make use of recurring payments. If you are paying each month for a car payment, when the vehicle is paid off, keep sending that amount into a savings account.
- Save in short sprints. For one month, avoid eating away from home and bring lunch to work. This reduced spending can make you more aware of your spending habits and increase amounts saved.
- Pay for your drinks (or snacks) at home. Every time you have a soft drink, other drink, or snack, “pay” for it be setting aside the “price,” such as $1 for a soft drink or $2 for a bag of chips. These funds will add up for your savings.
- Visualize your savings goal. Display a photo or other visual as a reminder of items you plan to buy or when saving for holiday gifts or a vacation.
- Actually, freeze your credit card. Place your credit card in a bag or container of water and place it in the freezer. This action can help avoid impulse purchases, and you can easily defrost it under warm water when you need to pay for an emergency.
For additional information on unusual money actions, click here.
- Have students talk with others to obtain other ideas that they use to save money.
- Have students create a video or other visual that might be used to encourage people to spend less and save more.
- Why do most people have a difficult time saving money?
- Describe personal action that you have used to spend less and save more.
The finances of many people have been greatly affected by the COVID-19 pandemic. Some of these recent financial situations are:
- Large numbers of households lacked an emergency fund, and were not prepared for unexpected financial difficulties.
- People who encountered difficulties making their mortgage and rent payments were offered relief and protection options to avoid losing their place of residence.
- Monthly payments and interest on student loans were suspended until a later date.
- Consumers lost nearly $80 million as a result of coronavirus-related fraud. Some common scams were offers to receive stimulus checks sooner, fraudulent unemployment claims, threats of utility shutoffs, online shopping and price gouging for high-demand products such as sanitizer and paper goods.
- COVID-19 surcharges were added by some businesses and restaurants to cover increased cleaning, sanitation, and food costs. Some dentist offices added an “infectious disease” or a “personal protective equipment” charge.
- A coin shortage resulted from banks and coin-heavy businesses being closed, lower U.S. Mint production, and increased contactless payments. To adapt, stores gave store credit or a free drink or chips when coins were not available for correct change.
For our current and future times of crisis, these money management suggestions are offered:
- Learn about federal, state, and local government assistance programs.
- Reassess and review your budgeting priorities.
- Reduce and avoid debt; contact creditors to discuss revised payment plans.
- Start to rebuild your savings cushion.
- Use online tools for managing finances and to automate savings and payments.
- Increase your awareness of possible frauds and scams.
For additional information on managing money during COVID and future times of crisis, go to:
- Have students talk to others about the financial difficulties and actions taken in recent months.
- Have students create a video with suggested actions that a person might take when facing financial difficulties.
- What are reasons that people might not prepare for unexpected financial difficulties?
- Describe actions you might take to prepare for unexpected financial difficulties.