The coronavirus pandemic has thrust the economy into a standstill. This has cost millions of people their jobs, shuttered small businesses nationwide, and led many to wonder how they will make it through the coming weeks and months. Government assistance will provide some relief, when it comes, but there are additional steps that individuals and small business owners can take to minimize hardship while riding out the storm.
Below, you can find simple, straightforward answers to some of the most common questions people have about their finances right now. You can also check out a list of helpful resources, including government assistance programs and other sources of emergency cash.
How to Keep the Money You Have
- Make a bare-bones budget for the next couple weeks, then repeat. Government relief checks are coming, but we don’t know exactly when. Make a list of things you may be able to cut from your normal budget, and create a bare-bones version of your budget that will stretch your current funds for as long as possible. Also, calculate how much you’ll get from the government so you can be prepared.
- Put off paying your taxes. If you owe taxes to the IRS, you now have until July 15 to file and pay. But if you don’t think you’ll be able to swing the new deadline, file for an extension or an installment plan.
- See if your monthly bills can be postponed or adjusted. Reach out to your billers to see if they will allow you to postpone or otherwise modify monthly payments. Student loan companies, mortgage lenders, and credit card companies are just a few of the companies offering such options right now.
Even if you can’t put off your full credit card payment, for example, you might be able to get a statement credit for at least part of the card’s annual fee and put interest on hold until things get back to normal. You generally have to ask, though, as well as explain the hardship that you’re facing.
What to Do If You Need Cash
- Look for refund opportunities from billers. Some businesses are offering financial relief of some kind for their customers during the pandemic. For example, several car insurance companies are returning a portion of customers’ premium payments given that no one is out driving. With that in mind, gather your bills – insurance, rent, loan payments, mortgage, everything – and call each company to see if they are offering refunds for recent payments. Irregular expenses count too – if your prepaid vacation got cancelled, for example, see about getting a refund.
- File your taxes if you usually get a refund. It’s easy to forget about tax season, especially since the IRS pushed back the 2020 filing deadline to July 15. But if you usually get a refund, you should file as soon as possible – it’s money in your pocket. The IRS has stated that accepting tax returns and sending refunds are “mission-critical functions” during this crisis, so there likely won’t be a greater-than-usual delay in processing.
- Look for part-time work. Believe it or not, some employers are hiring. If your work hours or salary have been cut or your self-employment income is drying up, delivery services and grocery stores are good places to start looking for supplemental income, assuming you’re comfortable with the health risks. Just make sure to keep yourself safe by wearing proper protective gear and keeping hand sanitizer nearby at all times.
- Consider borrowing, but be cautious. Borrowing may have been the best solution for many people in previous recessions, but this time is a completely different story. You should avoid taking on debt at all costs. Having said that, people with no better alternatives should evaluate their borrowing options and pick the best one for their situation. Consider borrowing from family or friends, your retirement savings, or a traditional lender via a personal loan or a credit card.
People with workplace retirement plans or IRAs can withdraw up to $100,000 (combined from all accounts) this year without the usual 10% penalty for early dipping. Also, under the recently-signed CARES Act, the cap on 401(k) loans has increased to $100,000 from $50,000, and any existing caps on borrowing percentages are lifted this year.
What to Do If You Lost Your Job
- File for unemployment. Requirements for unemployment insurance have been relaxed due to the crisis, so even if you wouldn’t normally qualify, you should apply if you’ve lost your job. For example, independent contractors and people who are self-employed wouldn’t ordinarily be eligible but are now due to the pandemic. Every state has its own filing process, which you can learn more about here.
- Prioritize which bills to pay. Gather your bills and make calls to every customer service line available, and ask if they’re willing to work with you. They may postpone a payment, accept a partial payment, etc. The idea is to reduce the number of bills you have to pay while avoiding delinquency on any of them.
Beyond that, the bulk of your focus and your funds available for bill payments should go toward bills that you really can’t put off because it would result in significant, immediate repercussions for your daily life. For example, even though it may be harsh, you might be better off postponing rent payments if you live in an area with a moratorium on evictions and that’s the only way you can afford food.
- Familiarize yourself with all of the assistance programs. You can find a handful of notable examples and great resources below:
- The FNS has increased food stamp program offerings nationwide.
- Don’t forget that each state has its own local assistance programs.
- Find other benefits you’re eligible for with the government’s Benefit Finder.
- The latest official updates can be found on the official government coronavirus site, at USA.gov, and the official coronavirus benefits FAQ.
What to Do If You’re a Small Business Owner
- Apply for government assistance. The CARES Act has created several temporary financial assistance programs to help small business owners, which are listed on the SBA website. They include payroll relief, economic hardship loans, SBA bridge loans, and debt relief programs. You can apply for forgivable loans through the Paycheck Protection Program (PPP) with your current SBA lender, or find a lender near you.
- Be aggressive in minimizing your cost structure. Prioritize salary cuts before laying off or furloughing the people who work for you. Terminate unessential services and aggressively negotiate with vendors. Vendors and employees recognize that unusual circumstances demand drastic measures, and they'll appreciate not being shut out entirely. On that note, existing tax law also allows employers to make fully-deductible “qualified disaster relief payments” to their employees.
What to Do If You Just Want to Help
- Give money to reputable non-profits. Some of the highest rated charities helping with coronavirus relief efforts are Action Against Hunger USA, Semper Fi & America’s Fund, and Direct Relief. You can check out where a charity ranks in our latest Best Charities report before giving, to make sure your money finds a good, impactful home.
- Donate supplies to hospitals or local government. Hospitals, nursing homes and other medical facilities still need supplies, so sending equipment directly to them is a good bet. Get in touch with your local medical facility directly and ask how you should go about getting supplies to them. Your mayor’s or governor’s office should be able to coordinate such donations as well.
- Watch out for coronavirus scams. The best way to screen scammers is to not send money to anyone trying to contact you. If you get an email or a text that appears to be from an organization you’d like to donate to, contact the organization yourself. Look up the organization’s official contact information and use that, rather than replying to any email, phone call, or text.
List of Government Assistance Programs & Resources:
- Internal Revenue Service – Official tax-related updates regarding coronavirus.
- Career OneStop – Find each state’s unemployment insurance information.
- Benefits.gov – FAQ on benefits and assistance related to COVID-19.
- Benefit Finder – See what government benefits you qualify for.
- Small Business Administration – List of COVID-19-related financial assistance programs for small businesses.
- PPP Lender Search – Find a lender for your federal Paycheck Protection Program loan.
- Food & Nutrition Service – Food-related assistance programs from the FNS.
- Centers for Disease Control & Prevention – Official CDC guidance.